Preamble

The House met at half-past Nine o'clock

PRAYERS

[MADAM SPEAKERin the Chair]

Wildlife Protection

Motion made, and Question proposed, That this House do now adjourn.—[Mrs. McGuire.]

Ms Julia Drown: I am delighted to have the opportunity to raise this important issue today, as 7 July is the 50th anniversary of the National Parks and Access to the Countryside Act 1949—now known as the Wildlife and Countryside Act 1981—which established the existing framework for wildlife protection and access to the countryside. I know that wildlife protection is a matter of great concern to hon. Members, especially on the Labour Benches, and I hope that a number of others will be able to participate in the debate.
I hope that, in the debate, we will succeed in persuading the Government to include a new wildlife and countryside Bill in the 1999 Queen's Speech, to cover the many issues that need to be addressed—the measures that would not only increase the protection of wildlife but increase people's enjoyment of the countryside. That would not only benefit us today, but would be an inheritance that we could leave for future generations.
The past 50 years have brought marked changes to our environment and countryside, some of them good, but many of them destructive and regressive. Many of our best wildlife sites have been lost and species that were once common are now endangered. That is a matter of great concern to my constituents and, sadly, sites in my constituency, are among those that have suffered as a result of inadequate protection.
The challenge to protect our natural heritage is greater than ever. That is emphasised by the shocking figures that starkly illustrate the threats to our countryside. At a rate of almost one a day, more than 300 of the United Kingdom's best wildlife sites are lost or damaged every year. We have seen a huge decline in wild flower meadows, lowland heathland, hedgerows and ancient woodlands in Britain.
Over the past 50 years, more than 25 species have become extinct in the wild in the UK, and more are heading that way. The World Wid Fund for Nature has projected that if no action is taken, water voles will become extinct in 2003, skylarks in 2009, and the song thrush will vanish from farmland by 2006.
Many have welcomed the Government's Green Paper on sites of special scientific interest, which I shall call special sites. It outlined how such sites could be better protected. However, it is critical that those proposals are translated into action at the earliest opportunity. Delay simply means more damage and destruction to our

countryside. The Government could do more than they have outlined in the Green Paper by examining the needs of species outside those special sites, where there are also serious threats to wildlife.
More than half of all hon. Members—343 in all—have signed early-day motion 11, which calls for a wildlife Bill based on the wildlife charter. The level of support that it has received sends the strongest signal to the Government that there is a firm belief right across the political spectrum that early action is essential.
The Wildlife and Countryside Act was revised in 1981, but it is out of date and is not working. Landowners and managers are not legally obliged to manage special sites for the benefit of the wildlife for which they were declared. There have been no prosecutions for destroying listed plants, and only a handful of prosecutions for harming animals, other than bats.

Mr. Tam Dalyell: I participated in the Committee stage, which was 100 hours, of the 1981 Act. One of the troubles is not the Act, but the reluctance of authorities to go to the courts to prosecute. I wish my hon. Friend well with all my heart in her efforts to persuade the Government to introduce another Bill, but something must be done to persuade authorities to go to law, when that is justified.

Ms Drown: I agree with my hon. Friend. The improvements to the legislation must include clearer statutory duties for landowners and managers, as well as better enforcement, strengthened powers to enter land, and stiffer penalties that would act as a real deterrent. There should be improved powers for statutory nature conservation agencies, so that they can fulfil an effective watchdog role. Landowners also need advice on how they can protect wildlife and which practices will cause damage.
The objective is not anti-farmer or anti-landowner legislation. Farmers in my constituency have made clear to me their commitment to wildlife and the environment, and how they want to co-operate with the Government and environmental groups to get the best for the countryside.
That brings me to incentives. I ask the Government to consider incentives to encourage landowners to invest in the proper management and protection of wildlife. In 1996–97, management payments on special sites amounted to £12 million. Those were typically compensation payments for not carrying out an activity, rather than an incentive for positive management. Compensation payments can be far less than an owner could get for rearing sheep or cattle, or for growing flax, so better directed incentives may reap better rewards for wildlife in the UK.
I urge the Government to take a broader look at how policies across Departments impact on the success of wildlife and countryside legislation. For instance, agricultural intensification has led to a reduction in the quantity and quality of habitats such as heather moorland, chalk grassland and lowland wet grassland. Species are lost because of overgrazing of pastures, undergrazing of marginal land, the use of chemical fertilisers and pesticides, and the loss of traditional crop rotations. Water abstraction can lead to the drying out of important wetland sites, and planning decisions made years ago continue to cause harm to sites—for example, through mineral extraction. Revising planning policy could help in that


respect. The Department for Education and Employment could also have a part to play in improving education in our schools on the environment and protection of wildlife and encouraging initiatives among children to help to protect their local wildlife.
A coalition of 22 wildlife organisations, including the National Trust, the Royal Society for the Protection of Birds, Friends of the Earth and the Wildlife Trusts, is supported by more than 5.5 million people in the United Kingdom. Most political parties would be glad of such a membership. It is campaigning for better legal protection for wildlife. Specifically, it wants legislation to be introduced that will deliver the Government's manifesto commitment to
ensure better protection for wildlife".
Such a Bill will also provide an ideal opportunity to introduce the Government's proposals for improved access to open countryside, and I know that ramblers in South Swindon are anxious for it to be enacted at the earliest opportunity. I therefore urge the Government to announce a comprehensive wildlife and countryside Bill in the 1999 Queen's Speech to back up their determination to halt further environmental degradation and to bring many of their good intentions to fruition.
In many cases, we cannot replace the wildlife habitats that we are losing without legislation to protect them. We certainly cannot bring back species that become extinct. There is a consensus on the need for action. For the sake of wildlife, the enjoyment that our countryside brings and the wonderful inheritance that we could leave for future generations, I urge the Government to listen to the calls made by my hon. Friends and by me today.

Mr. Desmond Swayne: I support much of what the hon. Member for South Swindon (Ms Drown) has said and I am sure that the Bill for which she asks will enjoy broad cross-party support. Indeed, I have expressed my support for it by signing early-day motion 11 and a number of similar ones.
For the benefit of the Minister, I want to air a parochial concern that, because of the nature of the New forest and the fact that it is the most important wildlife and ecological sanctuary in western Europe, is also a concern for the nation. I do not want him to take the opportunity presented by the introduction of a wildlife protection Bill in the next Session to slip through a new national park status for the New forest. My concern is that changes made to the existing management structure of the New forest will be for the worse and to the detriment of wildlife protection and that sensitive ecological area.
I estimate that no modern legislation would afford the powers that the existing structures enjoy, although those structures are undemocratic. It would not give them the power to stand against so-called progress and development. If hon. Members consider the issues of development versus conservation as they have arisen over the past 30 years in the New forest, they will find that, on every occasion, one or other of the local authorities—be it Hampshire county council or New Forest district council or its forebears—has stood on the side of development, democratically representing the wishes of the people.
To take the cause celebre—the great Lyndhurst bypass—there was a democratic call for the private Member's Bill on it which was considered in this Parliament. By sponsoring it, Hampshire county council was responding quite legitimately to the democratic concerns expressed by the people of Lyndhurst and of Lymington. We know the history of bypasses at Newbury and in the west midlands. We also know of the attendant legitimate concern of people who are interested in the protection of wildlife habitats and we have witnessed the public disorder that may arise from that concern. But we should bear in mind the fact that the people of Lyndhurst and of Lymington sought that bypass.
The bypass would have taken up an enormous swathe of the New forest. My concern is that, had there been a park authority—loaded, as it inevitably would have been, with representatives of the democratically accountable district and county councils—it would have said, "On people versus ponies, because of the development of the fast-growing, economically viable southern coastal strip below the New forest, people are more important that ponies, so we ought to let the bypass go through." I believe that that would not have been in the interests of the New forest or the nation.
It is the job of legislation to protect the interests of the New forest. The Minister will no doubt assure me, as he has done in the past, that the existing structures will not be constrained by any change in status that he might envisage. In other words, the existing laws, which govern the New forest and give the verderers court the power that it now enjoys to thwart development, will not be changed. I understand that, but there is a difficulty and it will arise merely because of the existence of a national park authority or quasi-authority.
I quote the experience of Anthony Passmore, one of the senior and most experienced verderers, as he told it to me. He said, "Mr. Swayne, a national park body may not constrain or change the existing verderers court and its authority, but suppose that there had been a national park authority, representing the strategic view of the future of the New forest and all that that implies, when the Lyndhurst bypass Bill was going through Parliament. Suppose that it had said that there should be a Lyndhurst bypass. Would the verderers court, irrespective of its ability and power to say no, have had—to put it bluntly—the guts to say no when the whole thrust of the strategic authority, which is charged with drawing up the strategy for the future of the New forest, had been that the bypass should go ahead?"
With respect to any changes that the Minister might envisage that would not necessarily change the power of the verderers, who are the guardians of conservation in the New forest, I warn him that there may be unforeseen effects. I would counsel him that any legislation that he might introduce that would change the status of the New forest or alter the balance of the powers within it would be highly likely to be a hybrid Bill, given the existence of the commoners and their rights. That might introduce all sorts of difficulties for a wildlife protection Bill, which the hon. Member for South Swindon would not welcome.

Mr. David Taylor: I congratulate my hon. Friend the Member for South Swindon (Ms Drown) on securing an Adjournment debate


on this most important topic. My constituency is at the core of the new 200 sq miles national forest. It is developing rapidly and transforming the landscape in several different counties. I shall speak about the mirror image of our expanding forest: the contracting ancient woodlands and the continuing threats that they face.
In England and Wales, ancient woods are areas where there has been continuous woodland cover since at least 1600. Planting was uncommon before that date, so woods were likely to have developed naturally. In Scotland, ancient woods date from 1750, because the best historical maps available are from a military survey carried out at about that time.
It is particularly relevant in the context of this debate to address the protection of ancient woodland, which is one of the great irreplaceable glories of our natural heritage. As the habitat most representative of original, natural, stable conditions, it is home to more threatened species than any other habitat in the United Kingdom. That is underlined by the United Kingdom biodiversity action plan, which suggests that broadleaf woodland supports nearly twice as many BAP species as any other habitat. It supports more than twice as many species as chalk grassland, and nearly three times as many as lowland heathland. It must be a key element in any Government strategy aiming to provide better protection for wildlife.
Ancient woodlands are the last bastion of a good deal of our wildlife heritage. They deserve proper protection, and there could be no more appropriate time than the millennium to consider that. The problem is that 85 per cent. of ancient woodland, including five of the 12 largest ancient woodland sites in the United Kingdom, lacks the designation of site of special scientific interest, or, indeed, any other designation. More than half of Britain's semi-natural ancient woodland has been lost since the first world war, mainly through conversion to conifer woodland and clearance for agriculture. In England, Wales and Scotland, just 300,000 hectares of ancient semi-natural woodland survive—an area roughly the size of Leicestershire. In Northern Ireland, there are no accurate records of the amount of ancient woodland, as far as I am aware.
Ancient woodland remains constantly under threat, especially from development pressures. The Government forecast that, in the next 20 years, 1.44 million more homes will be needed in south-east England; but that is the richest area that we have for ancient woodland. Kent, Hampshire, East and West Sussex and Surrey hold nearly 30 per cent. of such ecological treasures. The Channel tunnel rail link, the Newbury bypass and countless less well-known road schemes have threatened or destroyed areas of ancient woodland. Increasingly, ancient woodland is now to be found in small fragments: islands of biodiversity surrounded by a hostile landscape of intensive agriculture and urban sprawl.
More than 80 per cent. of individual ancient woods in the inventory of England and Wales are less than 20 hectares in size. Just 500 exceed 100 hectares—1 sq km—and only 12 ancient semi-natural woods are larger than 300 hectares. These fragments are often too small to sustain healthy populations of many woodland species, and too isolated to allow migration. As global warming becomes a reality, many species, unable to relocate, face the likelihood of extinction. The bleak picture is considerably worsened by the degradation of

our ancient woods through inappropriate use, poor management and repeated replanting with non-native species.
Although, in some ancient woodlands, endangered species, such as the hon. Member for New Forest, West (Mr. Swayne), hang on, in the past 100 years more species have become nationally extinct in broadleaf woodland than in any other habitat—46 species—and it also contains the most globally threatened and rapidly declining species—78. The Institute of Terrestrial Ecology's "Countryside Survey 90" showed that, between 1978 and 1990, there was a 14 per cent. loss of "species richness" in such woodlands, a higher figure than in any other semi-natural habitat.
What action should the Government take to staunch the worrying losses of ancient woodland? There are some encouraging signs that the need to protect these crucial sites is being recognised, but words must be matched by actions. The "England Forestry Strategy", published by the Government at the end of last year, contains a commitment to review the effectiveness of existing measures to protect ancient semi-natural woodlands, and to provide added protection if that is shown to be necessary. Organisations such as the Woodland Trusts, in its recently launched millennium challenges to Government—I believe that the Minister was present at the launch—have said how crucial it is to deliver on that core commitment. A similar commitment was given in the "United Kingdom Sustainable Development Strategy", along with a statement of the Government's aim to halt the trend of ancient woodland loss and fragmentation. It is crucial for those commitments to be acted on quickly.
Hon. Members sometimes speak of the need for protective mechanisms targeted at land adjacent to SSSIs, and of the importance of empowering Government agencies to fulfil an effective watchdog role. I agree: SSSIs certainly need to withstand environmental change, and the measures suggested would be helpful. Agencies have a key protective role, but I believe that similar measures for our ancient woodlands are needed even more urgently. There must be no further loss of ancient woodland. The time really has come to say, "Enough is enough."
I support environmental organisations that are pressing for a fully maintained, up-to-date inventory of ancient woodland covering the whole of the United Kingdom, with regular assessments to confirm the extent and quality of the nation's ancient woods. We must also provide better protection of ancient woodlands such as Gracedieu woods in north-west Leicestershire through legislation and the planning system. I believe that, in the longer term, a special designation for them will be needed to toughen up those controls.
We must also encourage owners of ancient woodland to understand its importance and manage it appropriately, and provide better guidelines and incentives to help them to do so. We must assist appropriate groups to continue to acquire ancient woods, and bring them under sensitive management. Finally, in providing new native woodland cover, we must target it to link and buffer existing ancient woodland sites that should be seen as the key resource in enhancing people's enjoyment of woodland.
I believe that we should treat ancient woodlands, those timeless places of great tranquillity and beauty, as the foundation of our approach to improving biodiversity. I should very much like to hear the Minister's comments.

Mr. Tom Brake: I join others in congratulating the hon. Member for South Swindon (Ms Drown) on securing this important debate. I support her call for the inclusion of a wildlife Bill in the next Queen's Speech, and would be happy to facilitate the swift passage of such a Bill.
As has been said, the debate is timely. Fifty years after the post-war Government's landmark legislation, new measures are needed to protect our wildlife. The House is well versed in the arguments: we debated them in an Adjournment debate initiated by my hon. Friend the Member for South-East Cornwall (Mr. Breed) on 14 April, and, only last week, a linked issue—the protection of areas of outstanding natural beauty—was discussed in an Adjournment debate called by the hon. Member for Gower (Mr. Caton).
Early-day motion 11, tabled by the hon. Member for Brighton, Pavilion (Mr. Lepper), continues to attract increasing support. As of yesterday, when I checked, it had the support of no fewer than 343 hon. Members. In the last Session, a similar early-day motion received the support of 302 hon. Members, so progress is clearly being made. A clear majority not just of Back Benchers, but of the House as a whole, now favours legislation. I hope that the Minister will note that.
Threatened species were mentioned in those earlier debates, and have been mentioned again today. I have obtained a few new examples. One is the nail fungus, which lives in the dung of horses, mainly in the New forest in Hampshire. The hon. Member for New Forest, West (Mr. Swayne) may well be familiar with such species. The nail fungus is internationally threatened, but has been refused protection because the threats that it faces are not intentional. That is a key point, which the Minister should consider. The Wildlife Trusts tell me that it can only advise on the need; there is no law to back it up.
There are other examples that are more local to my constituency. As a Member whose constituency is in Greater London, I am particularly concerned about the future of the Erith marshes in south London, which support breeding skylarks, grass snakes and the hugely important population of water voles. They are threatened by the proposed development of a supermarket distribution depot. Currently, the law can do nothing to stop that development.
I could mention many other wildlife species or habitats whose days are numbered. In Surrey and across south-east England, where the pressure to build is greatest, acres of ancient woodland are under threat. The Deptford pink, the sandy stilt puffball and dormice are all under threat somewhere in the United Kingdom.
Today's debate is timely not only because we are marking the anniversary of the National Parks and Access to the Countryside Act 1949, but for another reason, because the Government seem to be starting to wobble in their commitment to require that 60 per cent. of new build should be on brown-field sites. As the current rate of such build—1996 is the most recent year for which figures are available—is 56 per cent., a target of 60 per cent. can hardly be thought to be challenging. The Government have to be bolder both on that issue and on wildlife protection.
The debate is also timely because a revised planning policy guidance note 3 has just been issued, although it has relatively little to say about the biodiversity implications of new housing development. The PPG also provides no guidance whatsoever on minimising the indirect environmental impact of housing development.
I should like to deal with a couple of wildlife reform matters that I have not dealt with before. First, it is—at best—unclear whether the United Kingdom biodiversity action plan is adequate to fulfil the requirements of the 1979 European Union birds directive and the 1982 habitats directive, both of which require restoration of protected habitats. As the biodiversity action plan has not been implemented statutorily, many of its prescribed actions have no Government funding and can be undertaken only by voluntary bodies. I shall be grateful if the Minister will tell us whether such provision fulfils the function of habitat restoration required by the EU directives.
The second matter also concerns EU law. The EU birds directive requires the United Kingdom Government to designate as special protection areas sites that support internationally important concentrations of particular bird species. However, certain species listed for protection under the directive are not covered by the existing SPA network, as their populations are dispersed over a much wider area. Some heathlands in England—the Thames basin heaths, Wealdon heaths and Breckland—for example, support important populations or rare species, such as the stone curlew, woodlark, nightjar, and the Dartford warbler, but are still not protected by SPA status. Although that issue is slightly different from that of sites of special scientific interest, it is certainly relevant to today's debate, and illustrates the general crisis facing United Kingdom wildlife.
We should be in no doubt that time is running out for our wildlife. Here are a few facts: every day, another SSSI is destroyed or damaged; in the past six years, there have been more than 2,000 cases of damage to SSSIs; and 45 per cent. of all SSSIs are deemed to be in an unfavourable condition. Time is, therefore, of the essence—as I said in our most recent debate on the issue, in April. Since then, unfortunately, nothing much has changed—except that two more months have elapsed, and, undoubtedly, another 50 or 60 cases of damage to SSSIs will have been recorded.
In 1997, Labour was elected with a pledge to ensure better protection for wildlife. As we approach 2000, it is time to deliver on that pledge. In 1949, the Attlee Government had the foresight to introduce their legislation; now, the Government should show similar foresight. As other hon. Members have said, adequate legislation must be introduced in the next Queen's Speech. The House of Commons wants such legislation. I think that Ministers at the Department of the Environment, Transport and the Regions also want legislation, and I know that the country wants it. Now, it is time for the Prime Minister to deliver it.

Mr. Gordon Prentice: I am very happy to contribute to this very important debate on wildlife conservation. I shall keep my remarks brief, as I know that many colleagues wish to speak.
A moment ago, my hon. Friend the Member for North-West Leicestershire (Mr. Taylor) spoke about the importance of ancient woodlands, and said that we should


help people to understand the importance of maintaining them. As he was speaking, I allowed myself a wry smile, because it was only a few years ago, in 1995, when the warden of Windsor great park ordered the felling of 63 ancient oak trees that dated back to Queen Anne's days. The warden of Windsor great park is, of course, the Duke of Edinburgh. If he does not know the importance of ancient woodland, what hope is there for us?
The hon. Member for Carshalton and Wallington (Mr. Brake) spoke about the nail fungus living in the dung of New Forest ponies. Tragically, that is not the only species that has gone in recent years. I received a briefing from the Royal Society for the Protection of Birds, stating that the Essex emerald moth has gone—it is extinct. The mouse-eared bat, which sounds like an endearing creature, is gone for ever—extinct. As for plant life, alpine butterwort is gone, as is the purple spurge. I do not know what the purple spurge looks like—I have probably never seen it in my life—but I feel that it is a tragedy for all of us that it is gone.
We need to act, and to act quickly. This morning, on the "Today" programme, I heard the Minister for the Environment tell us that action would be taken. He was good; he is always good. If I had a vote for Ministers—tragically, I do not—he would have my vote. I hope that he keeps his job.

Mr. David Taylor: Kiss of death.

Mr. Prentice: We all want my right hon. Friend to keep his job. We do not want him to be moved, to placate some lobby saying, "The Government are too green. We've gotta get rid of him." I want him to stay where he is.
The countryside Minister told John Humphrys that we need legislation to protect sites of special scientific interest, and that it was not a question of if, but when—which had a familiar ring to it. This year, in March, when I withdrew my Right to Roam Bill, he told me that the Government were in favour of opening up the countryside—4 million acres of mountain, moorland, heath and common land—and that that would be done as soon as parliamentary time permits. This November, we want to see that parliamentary time permitted.
This Session, we have dealt with the City of London (Ward Elections) Bill. No one asked me whether we should consider that Bill. Mysteriously—magically—we discovered ourselves debating it in the Chamber. That Bill has never been debated in the parliamentary Labour party, and no one in the wider Labour party knows about it. Personally, I feel quite hostile to it; but we debated it. In the same breath, however, we are told that we cannot introduce wildlife and habitat legislation because of a problem with parliamentary time. There is lots of parliamentary time.

Mr. Brake: I wonder whether the hon. Gentleman would be prepared, as I would, to extend our stay in this place a little into our rather generous summer recess to address the issue?

Mr. Prentice: The hon. Gentleman's comments would carry more force if he had a few Liberal Democrat colleagues sitting behind him. I should say, just for the record, that one Liberal Democrat Member—from a party

that waxes lyrical about its concern for wildlife and habitat—is in the Chamber. It is a pity that, today, he could not get a few more Liberal Democrats Members to come and support his request.
This morning—to get back to the point—the countryside Minister said that he was seeking the earliest legislative slot for the relevant Bill. Listening to him, I started running around trying to find a pen, as I thought that he was going to say something of great moment, which he did. He said that there was a very good chance of obtaining that legislative slot, and then he played his trump card: "Tony Blair is strongly in support of this."
So what is the problem? The Prime Minister apparently supports strongly the need for early legislation. The problem is that too many people just do not believe it. Philip Rothwell, head of policy operation at the Royal Society for the Prevention of Birds [HON. MEMBERS: "Protection."] I am obviously too fired up today. Let me call it the RSPB. Mr. Rothwell was quoted in The Express as saying:
Tony Blair is not interested in the environment and he has surrounded himself with advisers who are not interested either.
The RSPB is not some fringe organisation that can be dismissed with a wave of the hand. There are 3 million members of the RSPB and other organisations dedicated to the protection of wildlife.
If the RSPB holds that view, we can imagine the millions more who feel the same. The perception exists that the Government are dragging their feet, and much that has happened has reinforced that idea. I was given a commitment in March that there would be legislation on the right to roam, but the papers tell us that the idea has been shelved in case it alienates landowning interests. Fox hunting is immensely important, particularly to our younger constituents, but the Government give the impression of being unwilling to take on the blood sports lobby.
Despite what my right hon. Friend the Minister for the Environment said on the radio this morning, there is a feeling that wildlife is another area that may fall off the end of the plank. If we are governed by focus groups that tell us that health and education are the top priorities—as they must be—it is inevitable that wildlife protection will be regarded as less important in the great scheme of things. But that is a mistake.
Our attitude to wildlife boils down to trust. Do the people trust the Government to deliver? If we do not deliver on wildlife, it will be impossible to make promises about legislation at the next election. We have an enormous majority, and we control the legislative agenda. We could sit here for 12 months to pass a wildlife Bill if we wanted to.
The Government must recognise that SSSIs are being damaged and that more must be done to protect habitats. There is huge support for legislation, and a Bill would immensely cheer up my colleagues in the parliamentary Labour party. A fortnight ago, we held a debate—no vote of course—on what we should like in the Queen's Speech, and there was overwhelming support for legislation on access to the countryside and on wildlife. To coin perhaps the wrong phrase, we could kill two birds with one stone by yoking the two areas together in a comprehensive Bill. The legislation would have no cost, or at most a very low cost. I urge my hon. Friend the Under-Secretary of State


for the Environment, Transport and the Regions to do all in his power to persuade the decision makers to introduce such a Bill in November.

Mrs. Helen Brinton: I am delighted to add my voice to those calling for greater protection for wildlife, and particularly to that of my hon. Friend the Member for Pendle (Mr. Prentice) who spoke with great passion. It is fitting that we should mark the 50th anniversary of the National Parks and Access to the Countryside Act 1949, which was, as so many have said, ground-breaking legislation introduced by a great Labour Government, by returning to the issue of wildlife protection and asking what improvements we can make.
We must accept that improvements are now needed to that legislation. My right hon. Friend the Minister for the Environment knows that, and I commend him on his hard work in this area. However, to make improvements that we all want for the protection of sites of special scientific interest, we need new legislation, and I hope that the next Queens Speech will include a Bill.
The need for improvements is illustrated by Government figures showing that more than 300 SSSIs are damaged every year. The effect of even just one more year's delay is absolutely clear. A year's delay would mean another 300 of our finest and most treasured wildlife sites being destroyed or ruined. We cannot allow that to happen.
My constituents have raised this matter with me. The protection of wildlife sites and SSSIs has real resonance with members of the public who want our countryside to be preserved and the wild animals and wild flowers that make the countryside such a special place to be protected. I have received many letters from constituents, and many hon. Members will have received, in the form of an enormous daisy chain, a novel and very large petition from their constituents.
It is easy to see why the issue has such resonance with the public. Many beautiful places known to our constituents are being damaged. In Northamptonshire alone, two SSSIs have been all but destroyed. A tiny fraction of Harleston heath remains; despite its SSSI status, the rules to protect it from development and forestry were too weak. Likewise, only a fragment of the Oakley purlieus SSSI remains, its having been destroyed by quarrying.
On top of the loss of those beautiful places, the public recognise the loss of important and well-loved species. I was staggered to see in today's report from the wildlife and countryside link that 25 species have become extinct in the UK since the passage of Clem Attlee's 1949 Act. We think of extinction as something that happens in countries struck by poverty, or as a relic of the last century. We think of it happening when people destroy habitats in a desperate attempt to grow food or scrape out a living. We do not think of it happening in a prosperous country such as the United Kingdom, where there are laws to protect the countryside.
Other species have suffered dramatic declines. The grey partridge has declined by 78 per cent. since 1972, and the tree sparrow by 87 per cent. Even among birds as common as starlings—once positively a pest because

of their enormous flocks—numbers have dropped dramatically. People notice these changes, and the introduction of a Bill to halt the decline would be extremely popular and effective politics.
As I said earlier, my right hon. Friend the Minister for the Environment has taken a superb, excellent and dynamic lead on the issue. The coalition of wildlife groups, with a total membership of some 6 million people—a heavy voting body there—welcomed the positive spirit of co-operation that he has shown and gave him an excellent reception at a public rally here at the House of Commons. Now is the time to build on the support and good will for the Government's work so far, but we need to maintain that momentum by introducing the necessary legislation to protect our wildlife.
Along with many other right hon. and hon. Members, I would be delighted if new legislation provided greater access for people to enjoy the countryside. This is how our Labour Government should celebrate the 50th anniversary of Clem Attlee's last Bill; it is how we should welcome the next century and it would delight the many millions of people who would welcome such protection.

Joan Ruddock: I congratulate my hon. Friend the Member for South Swindon (Ms Drown) on her initiative in introducing today's excellent debate. I very much support the call from my hon. Friend and others for new countryside and wildlife law. I do so as a committed environmentalist and as a Londoner.
Despite the common perception here and elsewhere, London's wildlife encompasses rather more than the pigeons in Trafalgar square. Londoners have always very much supported and valued the city's elegant parks and municipal flowerbeds. There is increasing recognition of the precious diversity of our wildlife. We have urban habitats, railway corridors, private gardens and wasteland, all of which support valued wildlife.
The London Wildlife Trust has a membership of 7,000 and I am proud to be one of them. We are engaged in a great fight to try to preserve our precious wildlife against the on-going and unrelenting pressures of development. It is not that the development is unwelcome—indeed, in my run-down and deprived constituency rehabilitation and regeneration are critical to our economic life and employment opportunities. Although I support building homes on brown-field sites and protecting the green belt, the pressure on those sites means that Londoners may be deprived of their wildlife and that is clearly not acceptable.
Our quality of life in London depends on getting the balance right between appropriate development and respect for ecology and the recognition that biodiversity matters. A surprisingly wide range of animals and plants are found in London. Many of them are thriving, but others are only just surviving. We cannot take that natural wealth for granted. In London, as elsewhere, there has been a haemorrhage of wildlife sites over the past 30 years. Unless we have stronger wildlife laws, the process will continue inexorably.
My constituency is no exception. Although its border is just five miles from here and it is a dense urban area, just 200 years ago it was an area of market gardens.


A nationally rare species of plant known as the Deptford Pink dates from that time. Another rare species is found in Deptford creek. The black redstart, which is rarer than the golden eagle, first bred in London in the 1920s. Seven per cent. of the national population and 40 per cent. of the London population of black redstarts are found in Deptford creek. However, Deptford creek is now a silted up part of the river. It is bordered on all sides by dereliction and it is prime land for redevelopment. The creekside project in my constituency, led by Jill Goddard, has undertaken a mapping exercise to ensure that we understand what wildlife is there so that the development that we welcome will preserve wildlife habitats. Amazingly, the Environment Agency has constructed new flood defences from old wood and in a way that protects the wildlife habitats.
Given all that, why do we need new laws? The black redstart is listed in schedule 1 to the Wildlife and Countryside Act 1981. Its nests are protected; its eggs are protected; breeding adults are protected and so are the young birds. However, for the rest of the year it is possible to destroy its habitat and, as we all know, if the habitat is destroyed, the species cannot breed.
There are many similar cases in other parts of London. Water voles are under threat in many areas such as the Erith, Crayford and Rainham marshes that were mentioned by the hon. Member for Carshalton and Wallington (Mr. Brake).
Many other sites are being targeted for development, including those occupied by skylarks, stag beetles and other wildlife. I have not time to mention them all, but they are extremely numerous and precious. They are important not only to Londoners, but regionally and nationally. Without new laws, the quality of life in our great city will be undermined and so will our biodiversity. I very much support today's debate.

Caroline Flint: I congratulate my hon. Friend the Member for South Swindon (Ms Drown) on securing today's debate. I should like to concentrate on peat lands and the Thorne and Hatfield moors that are in my constituency and the constituencies of my hon. Friends the Members for Doncaster, North (Mr. Hughes) and for Brigg and Goole (Mr. Cawsey). They form one of the United Kingdom's rarest and most vulnerable habitats and are all that is left of a vast wetland that once existed around the Humber estuary 4000 years ago. Over time, layer upon layer of mosses accumulated and became compacted in the waterlogged conditions. Plants and insects colonised the surfaces and rare or even extinct bog plant, dragonflies, butterflies and beetles were commonplace many years ago.
Today, 94 per cent. of the United Kingdom's peat bogs have been lost and fewer than 6,000 hectares remain in near natural condition. Thorne and Hatfield moors are part of this and today they represent England's largest raised peat bog site. They support more than 3,000 insects, 800 flowering plants and hundreds of liver-worts, lichens and fungi. They are vital for breeding, migrating and wintering birds including golden plovers, hen harriers and nightjars. People have worked on the moors for 500 years and the incredible archaeological record contained within the peat was, until relatively recently, undisturbed.
Such a site should be managed for its incredible wealth of bog vegetation and associated wildlife, yet, instead, I am sad to say, it is being threatened by commercial peat extraction. Instead of being treasured, protected and nurtured, it is being plundered for its peat.
Peat extraction threatens many important sites in the United Kingdom. Of the 14 extraction sites in England, nine have SSSI status. Thorne and Hatfield, along with Wedholme Flow—all three proposed EU Natura 2000 designations—account for more than 50 per cent. of UK production. The fact that extraction of peat is permitted on SSS1s highlights the major weaknesses in protecting those sites.
The problem dates back to 1951 when planning permission was granted for peat extraction. Then, as for hundreds of years previously, hand-digging was the norm, but industrialisation of the process has ravaged the land. In the 1960s, the process was mechanised and now, since milling methods were introduced in the 1980s—with little complaint from the Opposition—extraction involves the almost complete removal of surface vegetation along with the top layer of peat. That has occurred on large tracts of Thorne and Hatfield and the huge areas of stripped, bare earth, where once were beautiful moors, are a very sad sight indeed.
The vast majority of peat that has taken many, many years to be created, has been lost in only the past decade. That has heightened the sense of the urgent need for Government action. Each day that extraction continues and the land is stripped and drained, with the removal of tons of peat, nature's foothold on the Thorne and Hatfield moors weakens.
Locally, there is immense concern that such an important site is being lost. I get more letters from constituents on that issue than on any other. When English Nature proposed removing the SSSI status there was an amazing campaign, which we won. I was pleased to attend a meeting in Thorne where more than 400 local residents came along to make their feelings known. I know that my hon. Friends the Members for Doncaster, North and for Brigg and Goole have had the same experience.
Environmental matters are often said to be the concern of the middle classes—eco-warriors shut away in their leafy suburbs—but the letters that I get are from people in the former coal mining villages that surround the moors, who are witnessing the disappearance of a national treasure. They understand only too well that the extractors' economic arguments do not add up.
Extraction is not and never was a long-term employment option; it will result only in the permanent destruction of the moors. We believe that there is an alternative: a sustainable tourist industry on the site, protecting it while providing enjoyment and long-term economic stability for the local population.
There is such concern that my right hon. Friend the Minister for the Regions, Regeneration and Planning has established a peat working group that includes representatives of the industry and of the environmental lobby. Labour Members are keen that, wherever possible, business interests should be married with the public interest, but my worry is that, on this issue, there is no common ground that can be established between the extractors, who see money in peat, and the public, who want the moors to be preserved.
I am not surprised that the peat working group has so far failed to produce any report, but I am very concerned and I call on the Government to bite the bullet and take the long-term environmental view that is so clearly in the national interest. Many solutions are available. In the long term, my constituents want a complete end to peat extraction. That could be phased to avoid any major impact on jobs. We can work with the industry to develop alternatives to peat. I am sure that many hon. Members are keen gardeners and viewers of "Ground Force". We want a "Ground Force" team of our own in the Department of the Environment, Transport and the Regions. I leave it to Ministers to decide who should be Alan, Tommy and Charlie, but if the Government can find a solution that will preserve the moors for all time, they will receive great credit.
The longer we spend without a clear policy, the more events will take their own course, and the moors will simply be worked to death; with them will go much of the precious wildlife that they support.

Mr. David Chaytor: My hon. Friend the Member for South Swindon (Ms Drown) has done the House a service in securing this debate.
I want to express my support for the work done by my hon. Friend the Member for Pendle (Mr. Prentice), who has waged an unrelenting campaign to secure the right to roam. I agree that it is essential to ensure that access to open countryside is built into comprehensive wildlife and countryside legislation.
Such legislation also provides the opportunity to settle once and for all the contentious issue of fox hunting. No other issue has aroused such interest, especially in young voters. Our manifesto made it clear that our position was not to legislate against fox hunting but to provide the opportunity for a free vote, although there is huge public support for a ban.
I endorse the work of the Government and the previous Government in developing biodiversity policies. It is important to understand that wildlife protection is not only about furry creatures but goes far deeper: it is about environmental survival. The variety of species that survive is an indicator of the health of the planet on which we all depend. This is not an add-on extra: it goes to the heart of our survival on this planet.
I commend the previous Government's biodiversity action plan, and especially the recently published volume 4, on invertebrates. For those with any interest in creepy crawlies, it is a treasure house of fascinating information. I look forward to volume 5.
Whatever legislation we pass, the protection will be limited if we do not tackle the root causes of environmental degradation. In most cases, those are the deregulated economic processes, both industrial and agricultural, that have disfigured our society and environment for so many years. We must set this debate in the wider context of the reform of the common agricultural policy and the implementation of the Kyoto directive on climate change.
Whatever an individual Government may do, this is a matter on which the limitations of the nation state are most evident. We must work internationally.

The European Union has an important role and it is crucial that we play a full part in the various international treaties and protocols that have been and will continue to be established to secure biodiversity.
The Government and the previous Government have an enviable record in not only signing international treaties but ratifying them quickly. I urge the Government to continue that process, especially with the Kyoto protocol and the Århus protocol on access to environmental information. There are two important protocols that we have signed, but not yet ratified: the heavy metals protocol and the one on persistent organic pollutants. Those protocols are crucial to biodiversity and I urge the Government to ratify them swiftly.

Mr. Lindsay Hoyle: I welcome this debate. My hon. Friend the Member for South Swindon (Ms Drown) has given everyone an opportunity to express their views and feelings, which is very important. There is nothing more important to people in this country than looking after wildlife, habitats and countryside. There is more pressure as more people want to enjoy the countryside, and we must make it more accessible.
All our mailbags are filled with letters from people who want an end to fox hunting. Sooner or later, it must be tackled. The majority of the House and of the country support a ban. It is time to legislate. Let me describe what happens in conservation areas that are supposed to protect wildlife. In Rivington, a beautiful part of my constituency—I am lucky to have a mainly rural constituency where we can enjoy the pleasure of the countryside—the hunt comes along, and the fox hunters, having had no luck that day, dig out a fox. They do not kill it instantly. Oh, no. We cannot have fun without cruelty. They release the fox and chase it and chase it before killing it. Is that how we should treat our wildlife? I say not. The time has to come to end such cruelty.
In the southern lakeland, gamekeepers use traps on badgers. In their view, killing them instantly is obviously wrong. They believe in cruel traps and it takes a long time for the badgers to die. We have found half-skeletons of badgers. What a terrible end for such a beautiful animal. Badgers are protected, but such practices continue.
Protected species of birds have their nests robbed and their chicks stolen. There is no true protection. Fines are not enough: if it takes mandatory prison sentences to protect the birds, let us do that. Hen harriers—beautiful birds—are shot by gamekeepers because they do not fit in with what they think a grouse moor should be. The countryside is not about that; it is about balance. We must ensure that species are protected for everyone to see and enjoy, because they are not for the few to destroy. It is time for us to change our views about wildlife, habitats and countryside. If we work together, we can ensure our future.

Mr. Damian Green: I add my congratulations to the hon. Member for South Swindon (Ms Drown) on securing the debate. She will be either cheered up or worried when I say that I agree with about 90 per cent. of what she said. The Minister and I are getting used to each other: this is the second Wednesday


morning in a row that we have discussed countryside protection. If we go around the same course again next Wednesday, I hope that he will still be with us in his post.
It is clear that we broadly agree on many of the aims of wildlife and habitat protection, although I am slightly worried by the means that many Labour Members have discussed. There is an inclination to reach for the stick rather than the carrot, and I hope that the Minister will not go too far down that route.
I shall deal with the various details in a moment, but the question at the heart of the debate is not whether there should legislation, but why there has been none so far. Like the hon. Member for Pendle (Mr. Prentice), I listened to the "Today" programme this morning with great interest. However, when the hon. Gentleman said that the Royal Society for the Protection of Birds, with its 3 million members, had written off the Prime Minister as uninterested in the environment, he added a plea that the Minister for the Environment should retain his job. If I were that Minister, I am not sure that I would consider that the most helpful intervention in the debate this morning.
The "Today" programme item was instructive for several reasons. I was delighted to hear the hon. Member for Peterborough (Mrs. Brinton) repeat what she said on the programme—that the reason for introducing wildlife legislation was that the Labour party was worried about losing rural seats. That is a terrible reason for wanting to protect the environment, and anyway it will not wash, because of other factors that I shall describe later. However, I am happy to assure the hon. Lady that, even if she is right about the reason for introducing legislation to protect wildlife and endangered habitats, Conservative Members would still support it, because we consider the underlying issue so important.
The contribution to the programme this morning by the Minister for the Environment was equally instructive, although I am not sure that I am as optimistic about what the right hon. Gentleman said as the hon. Member for Pendle. To me, taking to the air waves to fight for a place in the legislative programme is a sign of desperation, not of confidence. I hope that I am wrong, that the matter is all stitched up and that the Minister was simply making a lap of honour in public. However, I suspect that I am not wrong.
The Minister for the Environment also said that the Prime Minister, and the whole Government, were very much in favour of the legislation. Perhaps that is so, but we are coming up to what may be the final full legislative session before an election in which the Government can guarantee taking a Bill through the House, and we are still unsure about whether such a Bill will be introduced, despite the manifesto commitment to do so. St. Augustine famously said:
Oh Lord, make me chaste, but not yet.
The updated, modernised, new Labour version would be:
Oh Lord, make me green—but only with the agreement of colleagues across Whitehall.
That will not do. If the Minister cannot give a positive commitment to early legislation, fears will arise that delay is turning into inaction, and that another broken promise is on the way.
What specific measures should any new legislation contain? The first point to be made is that it would be much more sensible if the Bill were confined to updating

the Wildlife and Countryside Act 1981. We would support a Bill with that general aim. Various hon. Members have spoken this morning about how a Bill should be extended to include much more controversial matters such as access and the right to roam, and some have even proposed that it be used to bring back anti-hunting measures. Anyone observing the debate will have noticed that the latter possibility, more than any other, set the juices flowing among Labour Members. It was instructive to see so strong a desire to oppress minority interests.
We all agree that there is an urgent need to promote wildlife and habitat protection, and Conservative Members would support and seek to improve any legislation to that end. However, including in a Bill other, much more controversial measures would impede its passage through the House, and might even prevent it altogether. That would be a tragedy for our wildlife and countryside. I hope that the Minister will resist the siren calls from Labour Back-Bench Members.
Any legislation would cover those areas already designated as sites of special scientific interest, but it could go further. The RSPB has proposed some helpful principles for the contents of a wildlife Bill, and I hope that the Minister will consider them seriously. The RSPB proposes that such a Bill should include a statutory purpose for individual SSSIs and the whole SSSI network. It should also contain provisions to give a legal underpinning to the bio-diversity action plan, to improve the powers of the statutory nature conservation agencies, and to impose a duty on all public bodies to protect and manage SSSIs.
However, we need a comprehensive strategy for all green land, whether it be part of an SSSI or not. Friends of the Earth rightly wants greater protection for species that are outside SSSIs, and a related problem involves land adjoining an existing site. If that land is developed unsympathetically, the knock-on effects can be very damaging to the neighbouring SSSI. We hope that any legislation to be introduced will be wider and more comprehensive. It should include incentives for better management and adopt a partnership approach.
I said that I was worried that Labour Members shared a tendency to reach for the stick rather than the carrot. In the long term, without the partnership approach advocated by responsible bodies such as the Country Landowners Association and the British Association for Shooting and Conservation, the effects on the countryside will be less beneficial. We need to engender support for the measures in a new Bill among people who live and work in the countryside. A permanent state of war between visiting regulators and people who live in an area every day would not be helpful.
I am sure that the hon. Member for South Swindon would agree that merely establishing a strict police force is not enough and will not work. Strict policing is necessary, but there must be a mixture of regulation and incentives.
In addition, there must be radical reform of the common agricultural policy. I was astonished to hear the hon. Member for Bury, North (Mr. Chaytor) say that one of the problems was that farming was too deregulated. Has he ever met a farmer? He said that industrial and agricultural deregulation was bad for the countryside. The problem with the CAP is not that it is deregulatory, but that it pours billions of pounds into encouraging farmers


to produce intensively in ways that may damage the environment. It pours only a few million pounds into encouraging them to farm less intensively.

Mr. Chaytor: That is not what I said. In fact, I agree with the hon. Gentleman's analysis: the problem with the CAP is that the resources have been wrongly directed, not the degree of regulation associated with it.

Mr. Green: I am glad that the hon. Gentleman has made that clarification.
There is much to be discussed in the detail, but all hon. Members clearly agree that the need for action is urgent. We have heard this morning about the various species that have been made extinct already, or are in danger. The doomsday list of the World Wide Fund for Nature is alarming, as the hon. Member for South Swindon noted. She mentioned some of the species in danger, but the WWF has warned that the high brown fritillary butterfly and the pipistrelle bat may be extinct by 2007, and that even the skylark may have vanished by 2009. Clearly, those would be large-scale ecological disasters.
Therefore, as long as he sticks to what is sensible and gets on with it, the Minister has a chance to lead a wide consensus among all the parties, including even landowners and the many environmental non-governmental organisations. If he does that, Conservative Members will seek to give him a fair wind when the legislation is introduced.

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Alan Meale): I thank the hon. Member for Ashford (Mr. Green) for his kind remarks and congratulate my hon. Friend the Member for South Swindon (Ms Drown) on using her parliamentary time to obtain a debate on such an important issue, especially at this historic time. She is a worthy champion on the issue, as she is on a number of others.
That is not surprising as my hon. Friend's constituency is fortunate to include several nationally important nature conservation sites, including three geological sites of special scientific interest at Great quarry, Okus quarry and Old Town railway cutting, and a further four biological SSSIs at Coate water, Burderop wood, Clouts wood and the Coombes, Hinton Parva. Included within those sites are open water, woodland bird communities and chalk grassland. They all contribute to the overall value of the national SSSI series and to protecting our natural heritage for our children and grandchildren.
The Government share the view of many of the hon. Members who have spoken that the UK's nature conservation heritage should be given effective protection. Indeed, I welcome the opportunity that is provided by the debate to reaffirm the commitments in the Labour party's manifesto to affording better protection to wildlife, and the priority that the Government are giving to implementing those manifesto commitments.
At this point, I should like to answer queries that several hon. Members have raised that may not be answered in my brief. That is important because it is always an easy option just to go on and not to give replies to specific queries in a debate.
My hon. Friend the Member for South Swindon raised incentives for management. I confirm that the Government propose to move from a compensatory scheme of payments to landowners to positive agreements. Even now, in advance of any changes in legislation, a substantial number of payments for support action are under way, rather than cash compensation payments.
The hon. Member for New Forest, West (Mr. Swayne) never misses an opportunity to raise questions on the area that he represents. I repeat my assurances to him that, within the present consultation, there is no thought within Government for any changes that would affect the status of the verderers. I say it every time. To his credit, he always raises a range of issues on the New forest. On that particular one, I reconfirm our position.
The hon. Member for Carshalton and Wallington (Mr. Brake) mentioned widely dispersed bird species, which pose a particular difficulty for boundary definition. We are committed to effective and full implementation of obligations under the birds and habitats directives. My Department is discussing with English Nature the best way in which to protect such wide-ranging species. I will write to him to give further information on the matter, and try to get an answer to the point that he raised on restoration.
The hon. Member also asked me to acknowledge the tide of support for early-day motion 11. There is no doubt that that can and, indeed, should be done from the Government side of the Chamber. We are aware of the support and greatly impressed by it. It is very large—one of the largest gatherings of support on an issue since the last election. The Government are reassured by the level of interest and the swell of opinion on the need for legislation. We are aware of that and keep it in mind in all our considerations.
My hon. Friend the Member for Doncaster raised the question of peat working on SSSIs. [Interruption.] Sorry—my hon. Friend the Member for Don Valley (Caroline Flint). We support moves to encourage alternatives to the use of peat. Where sites have Natura 2000 status, there will be obligations to review extant planning permissions. We are considering the options for other sites. All the issues that she raised in respect of that will be considered.
The Government's approach to wildlife conservation must blend a strong statutory framework for the protection of species and their habitats with positive measures through biodiversity action plans and environmental education. In that respect, we have encouraged a participative approach to conservation through partnerships between the public and private sectors and involvement of voluntary conservation organisations and the public. We believe that each element is important in ensuring that we protect and enhance the value of our countryside.
I take first the protection of habitats. We continue to make good progress in implementing Natura 2000, the network of special sites that are recognised at European level. The United Kingdom has now classified 200 sites as special protection areas for their ornithological interest under the birds directive, and submitted 340 sites as candidate special areas of conservation to the European Commission under the habitats directive, giving recognition and enhanced protection to the cream of our nature conservation heritage.
The UK Government are committed to full implementation of the requirements of the habitats directive. Our SAC list has been selected through a rigorous and iterative scientific process, which has applied the directive's criteria consistently throughout the UK. What is more, there has been full consultation on all the proposals, which, in a number of cases, incorporated changes in the light of comments from the voluntary conservation movement and other consultees. I acknowledge criticisms of our list, but those have been based on unscientific comparisons and misunderstandings of the directive's requirements.
Natura 2000 sites—together with sites listed under the Ramsar convention on the conservation of wetlands of international importance—are all sites of special scientific interest, all of which are designated for their national importance and constitute some of our most precious areas for wildlife, hosting rare or endangered species and providing habitats where they can flourish and—I hope—multiply. Although many are well managed and in good condition, and landowners and managers enjoy a constructive relationship with the conservation agencies, the Government agree with hon. Members who have expressed concern about special sites that have been damaged, or whose interest is declining as a result of both human activities and natural processes.
English Nature is already aiming to increase the percentage of sites in England that are being positively managed for conservation and to reduce the proportion that are in an unfavourable condition. The comprehensive proposals that we announced in last year's Department of the Environment, Transport and the Regions consultation paper on SSSIs will also help to deliver real improvements in the immediate future and will substantially strengthen English Nature's hand as steward of the most valuable examples of our natural heritage. Those proposals covered a range of options and looked at ways in which enhanced protection could be delivered quickly without new legislation, as well as the case for legislative change.
The Government believe that it is important to foster the constructive relationship that has already been established with the owners of SSSIs, many of whom are sympathetic to conservation aims and work actively alongside statutory agencies to conserve the interest of their land. On SSSIs, the consultation paper emphasised the need for a variety of partnerships with owners and occupiers, with local communities and voluntary conservation organisations and with Government Departments, some of which are major landholders and custodians of our wildlife heritage. We accept the responsibility that that places on us. We will help and encourage others who similarly accept their responsibilities for the nation's wildlife.
The paper acknowledged—

Mr. Deputy Speaker (Mr. Michael J. Martin): Order. We now come to the next debate.

Police Funding

11 am

Mrs. Jacqui Lait: May I say, Mr. Deputy Speaker, how grateful I am to have secured this debate. I thank the Minister of State for visiting the National Missing Persons Helpline, of which I am a trustee. Those who work for the helpline very much enjoyed the visit and hope that something constructive will come out of it.
Since my election to Beckenham, the subject of police numbers and the link with police funding has come up constantly. I am sure that many of my hon. Friends and Labour Members also get a lot of complaints from people who say that they do not see enough police on the beat. Often, constituents do not link that subject with reduced crime figures or the sophisticated arguments about how intelligence-led policing is changing the nature of policing.
In Bromley, of which Beckenham is a part, we have an active police consultative committee and sector working parties, which constantly discuss police numbers and funding. In the annual report for last year, which was published in June, the committee chairman states:
During the last three years, I cannot recall a year when there has not been underfunding to cover the cost of maintaining the existing strength of the police with inevitable cuts in the service in one way or another. This year the increase in the annual budget for the Metropolitan Police is to be 1.7 per cent. which is below the national average increase of 2.7 per cent. It again falls short of what is needed to cover the increase in police pay and pensions and the rise in inflation. In past years there has been a steady reduction in the number of uniformed officers in the Bromley area to cope with inadequate funding.
His comments are backed up by Bromley division's own figures. Its manpower target strengths, to use the jargon, have gone from 497 police in the borough and the division—the two are co-terminus—in November 1994 to 440 this year. Civilianisation has not replaced the uniformed copper. In November 1994, there were 121 civilian staff. This year, the figure is down to 113, so the numbers of both groups have dropped.
Penge, which is in my constituency, has been identified by Bromley police in a much-admired document on crime and disorder, as a high-risk area. Last April, the inspector in charge told the Penge sector working party:
we have 9 Community Action Team Officers for community policing between Crystal Palace and Coney Hall"—
another area of my constituency—
with several having 2/3 council wards to patrol on foot.
As hon. Members know, in particular those who represent cities, that is a large area to cover. The inspector continued:
There are 3 high street patrols, in Penge, Beckenham and West Wickham.
Some people may think that leafy Bromley borough and Beckenham should reduce their police numbers to help in other parts of the Greater London area where crime levels are higher. However, the authentic voice of the Beckenham resident wrote to the Home Secretary and to me at the end of 1998. He pointed out that
there has been growing disquiet among members of the public concerning the near-absence of uniformed officers patrolling the streets on a routine basis… During the past two or three years there appears to have been a reduction in real terms".


He is absolutely right. Figures provided by the Metropolitan police show that, since 1995, that force has reduced from 27,945 to 26,563 this year. Indeed, when I was on the Metropolitan police parliamentary scheme along with two Labour Members, one of whom is here today, the story everywhere was the same and I am sure that the hon. Member for Poplar and Canning Town (Mr. Fitzpatrick) will agree. The police are concerned about cuts in manpower, old equipment and buildings that need refurbishment.
The pattern is repeated nationally. It is happening not merely in Bromley or in the Met, but throughout the country. Just last week, on 30 June, a Home Office press release stated:
Numbers of police officers have fallen by 793 to 123,922 in the year ending March 1999—a reduction of less than 1 per cent.
The first sentence of that press release shows the Home Office's sensitivity about linking police funding with police numbers. That sentence reads:
The number of police officers has fallen despite increased police spending".
I can understand and appreciate why the Home Office is going to such lengths to decouple funding and police numbers. Linked with that issue is the reduction in crime. We all congratulate the police on reducing crime, but most of us would agree that other issues have contributed to that reduction. When employment is high, there tends to be a reduction in crime.
The Audit Commission has backed up the Home Office and I can understand where it is coming from. It says that some forces have higher clear-up rates and lower numbers of police relatively and/or smaller budgets—

Ms Hazel Blears: The Audit Commission supports the view that there is no direct correlation between numbers of officers and amounts of crime. On the last occasion on which we debated the matter in the House, 18 March, the right hon. Member for Sutton Coldfield (Sir N. Fowler) said, unusually:
However, I rather agree with the Home Secretary on that point. I do not think that there is a direct correlation between police numbers and crime."—[Official Report, 18 March 1999; Vol. 327, c. 1277.]
Does the hon. Lady agree with her right hon. Friend?

Mrs. Lait: If the hon. Lady listens to the rest of my speech, she will understand my argument. It is difficult to disagree with the Audit Commission's figures, which show that smaller forces may have smaller budgets and higher clear-up rates. Indeed, the Audit Commission has compared like with like: it has compared one rural force with another and found differences in clear-up rates; it has also compared one inner-city area with another and found differences. Statistically, I do not disagree, but the problem is that the British public and police forces themselves do not make that link. I suspect that the better clear-up rates reflect both good management and historic spending patterns. As I pointed out, the problem is that the public and the police do not believe it.
As I said, the consultative committee in Bromley regularly links underfunding with lack of police numbers. When we toured various operations under the parliamentary scheme, we were told time after time by

the police, from the constable on the beat to the inspector in charge of any police station, that cuts in funding were leading to reduced numbers.

Mr. Ian Bruce: One can always bandy statistics about, but for the first time in many years, there has been a cut in police manpower and in auxiliaries in Dorset and, for the first time in five years, crime has increased. That shows that criminals, at least, think that it is now safer to commit crimes in Dorset because fewer police and fewer resources are coming from this Government.

Mrs. Lait: I would not go so far as to argue that, but it is an interesting point. One is conscious that hardened criminals are as astute and aware of the potential for crime and not getting caught as the general public are aware that, as they believe, there are not enough police on the streets.
The constables will describe the increased pressure that they are under because of what they believe are shortages in numbers on patrol. One of their principal concerns is that, when they are in trouble—they could easily suddenly find themselves in a fracas on a hot day like today, when people's tempers are short—there might not be sufficient back-up to help them out of it. Indeed, that already happens. If the police feel vulnerable and lose confidence, they will not do their job to the best of their ability and constituents will complain.
As I said to the hon. Member for Salford (Ms Blears), I acknowledge the argument—I am sure that she shares it—that modern and effective policing is intelligence-led. It is effective and it works. We have seen how successful Operation Bumblebee has been, for example, in targeting criminals and ensuring that continual troublemakers are taken off the streets or warned that they are being watched. Intelligence-led policing contributes enormously to modern policing, but I return to the fact that the British public do not believe that it is working because they do not see police on the streets.
The Police Federation also does not see police on the streets. Fred Broughton, the chairman, was quoted in The Guardian of 18 May. The article said:
Violent crime has increased because police forces are having to cut the number of officers on the beat.
Mr. Broughton said successes in tackling burglary and car crime had been bought at the cost of a failure to patrol the streets.
'It is clear to every force that the uniformed presence is reducing on a monthly basis. That is while the government and chief police officers are talking about an alternative. All the indications are that it will get worse.'

Ms Blears: The hon. Lady has made the point that intelligence-led policing works, but that the public do not believe that crime is being tackled unless they see bobbies on the beat. If she accepts the argument that there are better ways in which to spend our resources to tackle crime, is she in favour of spending money on, say, a medicine that does not work simply because the public believe that it does? Is it not her task and our's to lay out the facts and convince the public of what actually works


in tackling crime—contrary to their perception? It is surely down to people such as us to play a role in ensuring that the public believe such things.

Mr. Ian Bruce: They do not in Dorset.

Mrs. Lait: As my hon. Friend says, people in Dorset do not believe it—nor do people in Bromley, the Police Federation or, as I am about to quote, the Association of Chief Police Officers.
John Newing said that the 1999–2000 settlement
leaves the Police Service well short of what it needs.
Even though the Home Office has said that the 2 per cent. efficiency savings can be reinvested, and even though the police forces can keep the income from property sales, the forces are facing the need to spend much more money on new communications systems.
Anyone who has been into a police station will have seen the variety of computers and how they are not linked to one another. Work is duplicated because the custody officer may enter information into one computer, while upstairs the detectives are putting the same information into another system. That shows the need to spend money on communications. I am not arguing about the need for that; however, the public must also be reassured. If they are not, the whole basis of policing by the consent of the community will disappear.

Mr. Desmond Swayne: Does my hon. Friend agree that the phenomenal clear-up rate of the Victorian police force was primarily not because their methods were less fastidious, but because they lived in, and were part of, the community that they policed? As we have withdrawn forces into almost fortress-like police stations and police officers into panda cars, we have lost the proximity of the community, which was the source of success.

Mrs. Lait: I can see my hon. Friend's point, although the whole purpose of the Scarman and subsequent reports was to try to develop the role of the community police officer, who builds up the intelligence that was enjoyed by the Victorian police force. We have not lost that form of policing; the problem is that we do not have sufficient police officers to be able to conduct it as effectively as one would wish. That is why I am linking the two subjects—even though the Home Office and the Audit Commission doubt the correlation between police funding and numbers. Such a link needs to be made because we must ensure policing with the consent of the community.
I pointed out the need for new communications systems and the cost of them. There is also the cost of the pensions problem facing all police forces. We must acknowledge what a large proportion of their budgets is going on pensions—about 17 per cent. in the Metropolitan police and 20 per cent. in Greater Manchester. Obviously, if we were starting again, we would not start from here. A pay-as-you-go pension fund and an historic inability to control it has left forces with a huge demand on their slender resources. John Newing said last week that if additional funds are not forthcoming, there will have to be cuts in the numbers of officers in operational roles.
As a great believer in the development of the pensions industry and the provision that we have managed to create, I would say that it is time for the Home Office

and police forces to get to grips with the pay-as-you-go pension scheme and reform it. That would be a most effective way of reducing the pressure on budgets. I know that that will not be easy and that it is a very long-term solution, but it should certainly be considered closely.
Despite the demands on budgets for things such as communications systems and pensions, I return time and again to the importance of the Home Office recognising the inextricable link in the minds of the British public between funding and proper staffing. The public cannot believe that there is no such correlation. As I have—I hope—shown, nor can many who work in the police, even when crime is coming under control. The position has clearly worsened recently and the forecasts are deeply pessimistic.
The police force is in a unique position to make its views known and clear to every member of the public. That will only reinforce the public's fears. The police, particularly if they are involved in community policing, are talking day in, day out to our constituents. If they are fearful of their future, they will make the public—our constituents—fearful, too.
The Home Office must ensure that the public are reassured that the thin blue line will hold. At present, the public believe that the line is under significant pressure. I very much hope that the Minister can reassure us that there will be a greater police presence on the streets, so reassuring our constituents.

Mr. David Drew: I am pleased to participate in this important debate. I shall restrict most of my remarks to the issue of funding.
The hon. Member for Beckenham (Mrs. Lait) realised that the crux of the apparent contradiction is due mainly to the perception of crime. In the past couple of days, the Women's Institute has referred to the importance of police on the beat in rural areas. However, that is not necessarily the same as catching criminals. We must ensure that we put resources where they really count, and invest in intelligence and the most effective policing, as my hon. Friend the Member for Salford (Ms Blears) made clear. I should be worried if we went away from the debate believing that the contradiction was easy to solve. The Government have got the balance right. I shall explain how that can be enhanced and how it can be made clearer to our constituents that the funding situation is right and reasonable.
I shall restrict most of my remarks to funding, which is at the core of the debate. I have been engaged in correspondence with my hon. Friend the Minister about the needs of Gloucestershire. We shall be having a meeting shortly to discuss those matters in greater detail. It was a little disingenuous of the hon. Member for Beckenham to refer to the pensions problem, because the Conservative Government signally failed to grapple with the issue. They have left us an incredibly difficult legacy. Let us be honest. No police organisation wants to renegotiate the pensions situation, because they could not get a better deal. I may be wrong on some of the details, but I believe that a police constable retiring from the force today after 30 years' service would take about £60,000 in cash, plus half his current salary. With the best will in the world, that cannot be improved by a renegotiation of the pension terms. However, we shall have to deal with that dilemma.
I do not want to speak for very long, because I know that others want to contribute to the debate. Many factors, including the pension situation, affect the funding requirements. I am grateful to the Government for addressing Gloucestershire's funding problems in respect of the number of royal households in the country. The problem with the 2 per cent. efficiency savings is that they have to be found from those areas, as well as from the wider budget. That causes us some grief in Gloucestershire. Perhaps that requirement should be reconsidered.
We need to fund policing properly, but we must also ensure that we are policing in the right way. We welcome the progress on the public safety radio communications project—a phrase that does not slip off the tongue easily—but we have to find a means of funding it, which is difficult. In Gloucestershire, there will be an annual leasing cost of £750,000, which is the equivalent of 40 police constables. I hope that the Government will come up with some good news on that. It is a project that we not merely want, but have, to implement. Gloucestershire has been bedevilled by a problem of hills. The communications network has never functioned properly, because people on one side of the Cotswolds cannot communicate with those on the other side. I try to go out with the local police on a Friday night. They have to switch wavelength regularly because that is the only way in which they can communicate with each other. That is a bit ramshackle at the end of the 20th century, when we are looking for the most effective way to deal with law and order issues.
We welcome the drug strategy, initiatives on youth offending and the Crime and Disorder Act 1998, but we must find ways to fund those ideas. Our old friend information technology will have a part to play and a lot of money is being put in that direction. We all agree that such spending should not be at the expense of front-line policing. People have a perception of crime and want to see their bobby on the beat, but they also want the most effective means of catching criminals and following up the more deviant members of society. We have to find ways of doing that.
We can argue about the statistics and what they mean, but we were disappointed with the 1.4 per cent. increase in funding in Gloucestershire, which was below the national increase of 2.3 per cent. We responded by putting up our budget and raising our precept. I could argue that Gloucestershire's precept was too low, but we had the fourth-highest increase of all police authorities, and there is a limit to the number of times that we can do that. We may now be more in line with the family of authorities that we all lovingly compare everything to in these days of benchmarking and the rest of it. I hope that the Home Office and the Treasury will look favourably in future at how we can make good our funding needs.
We are looking to the future. I thank my hon. Friend the Minister for our success in achieving funding for the tri-service control room project, which brings the police into line with the ambulance and fire services to make best use of our control rooms. There are ways of taking that initiative further forward. It is an efficient way of using our funding. That may be special pleading, but I hope that the Home Office will have more to say today or in the future about making more effective use of such funds.
We do not pretend that funding is not an issue. I am one of three Gloucestershire Members here today, together with my hon. Friend the Member for Gloucester (Ms Kingham) beside me and the hon. Member for Tewkesbury (Mr. Robertson). We have regular meetings with police authority representatives, who tell us their problems. Funding is always at the top of their agenda, so there is no point in pretending that it is not. However, the situation did not start with the election of a Labour Government in May 1997. It is an historic problem. In the debate on 18 March—which my hon. Friend the Member for Salford mentioned—I talked about having separate police authorities, some of which, including mine, are small. That has its benefits, but it also has its downsides, because there are no economies of scale and we were bound to have difficulties with the separation of administrative costs and overheads resulting from splitting police authorities from county councils.
Within reason, we are doing what we can. We need more funds. We need help from the Home Office and the Treasury to get the special projects up and running and to make them as effective as possible. That is as true in rural Britain as in urban Britain, as the recent report of the Women's Institute says. A report by the Back-Bench group of Labour Members published a couple of weeks ago contains an interesting article by Simon Anderson of System 3 about people's perceptions of crime in rural areas and how the globalisation of crime has a special impact on more isolated communities, because they want to see the police presence, but they also want to know that the policing is as effective as possible. That is the essence of the problems with getting the funding formula right. There is a need for more help in rural areas, because the funding formula is not as effective as it could be.

Ms Tess Kingham: We have heard a lot about the perceptions of the public and the desire for more police on the beat. However, we should also recognise that the Government have done a great deal in looking at other ways of preventing crime and taking the stress off police forces by ensuring that there are always police on the beat to deal with the after-effects of crime and clear-up rates. We have had the Crime and Disorder Act 1998 and there is a duty on local authorities to have local crime prevention partnerships. We had a big launch of that in Gloucester, which included all the stakeholders. The initiative was greatly welcomed by every section of the community involved. The police said that they felt that it would have a great impact on the public perception of crime and on preventing crime, which would take the stress off the police.

Mr. Deputy Speaker (Mr. Michael J. Martin): Order. The hon. Lady must sit down when I get to my feet. That is the first thing that she must learn. The second is that she should not make a speech during an intervention.

Mr. Drew: I acknowledge the work done by my hon. Friend the Member for Gloucester (Ms Kingham) in her constituency, both now as a Member of Parliament and before coming here. She has much to offer, and she made a valid point.
We will not hide from the funding issue. We welcome many of the initiatives and we recognise that there must be a balance between urban and rural areas. All the figures show that the majority of crimes are committed in urban


areas. The incidence of reported crime is four times greater in urban areas than in rural areas, but we have seen a relative increase in rural crime. That is due partly to globalisation, because people can move about more quickly. People in rural areas feel very vulnerable.
I hope that all that is recognised in the formula. I am sure that my hon. Friend the Minister will have some good things to say about how all that can be rectified and about the most appropriate use of the overall funding package.

Mr. Laurence Robertson: I congratulate my hon. Friend the Member for Beckenham (Mrs. Lait) on securing this debate and on the detailed way in which she gave examples of where police funding is inadequate. It is a pleasure to follow the hon. Member for Stroud (Mr. Drew), who made the case for extra funding for Gloucestershire. I want to mention that. The fact that there are three Members of Parliament from Gloucestershire in the Chamber suggests that things are not well with police funding in that county.
The general funding of public services leaves something to be desired. The Labour party spent 18 years telling the public how the Conservatives had underfunded public services, but, now that we have a Labour Government, we still have similar problems. It is not only the police who are suffering in Gloucestershire. Despite the high-profile figures about health service spending, the health service in Gloucestershire is having to make £5.5 million worth of cuts because of inadequate funding. Tewkesbury borough council has had its grant reduced, causing it to increase the council tax. It has been named and shamed by the Government for reacting to a problem that the Government brought about. The same is true of police funding.
The national pay award, over which each force has no control, was 3.5 per cent. for 1999–2000. Price inflation was 2.2 per cent. Yet Gloucestershire constabulary has been given an increase of only 1.4 per cent. Again, as with the health service, the Government have made a high-profile pay award, with which very few people would disagree, but they have not funded it. That causes a big problem.
Why has Gloucestershire been given such a derisory award? Is it because the Government are diverting money from the shire counties to areas in which their more natural supporters might live? Every shire county apart from two has suffered real-term cuts. The Minister might find that amusing, but it is not amusing to those who live in shire counties. As the hon. Member for Stroud said, Gloucestershire has suffered the fourth largest real-terms cut to its operational budget. I am aware of the problems in the Labour areas to which the Government seem keen to divert money, because I was not born in Tewkesbury, but I am also aware of the problems in rural areas.

Mr. Ian Bruce: My hon. Friend is being over-generous to the Government. In Dorset, we also saw a real-terms cut in the operational budget. Was there not also in Gloucestershire, as there was in Dorset, a massive stealth tax because the Government ensured that local tax payers were paying for all the additional money that came forward? Not a penny extra came from the Home Office or the Government.

Mr. Robertson: I would be called to order if I went too far down that route, but my hon. Friend is absolutely right.
There are difficulties with crime in rural areas. For example, all Gloucestershire Members have received a note from the chief constable about drugs and drug-related crime. That is becoming as much of a problem in rural areas as in urban areas. The sparsity of policing in rural areas encourages that crime.

Mr. Richard Allan: I do not wish to spoil the hon. Gentleman's argument, but if he believes that money is going to traditional Labour areas, which mine used to be, he is wrong. We are not seeing that and dancing in the streets in my area. The police are reporting just as many problems in areas such as South Yorkshire as they are in rural counties.

Mr. Robertson: Perhaps I have underestimated the funding problem.
The 2 per cent. efficiency saving is being taken into account when grants to constabularies are being calculated. As the hon. Member for Stroud said, the 2 per cent. target includes police pensions and security elements, over which chief constables have no control. A 2 per cent. saving nationally may be achievable, but it is difficult for each force to achieve it locally. For example, the police force in Gloucestershire has to provide security for the royal family. We are delighted that they live there and the force receives a grant to cover the cost, but, given that minimum standards of security must be provided, that should not be taken into account when calculating the 2 per cent. efficiency saving.
Gloucestershire has already made many efficiency savings. It has one of the lowest figures in the country for officers retiring through ill health, sickness levels are below average and it has the smallest number of superintendents. Given all that, why has Gloucestershire received a real-terms cut? Where is the money to come from? As we have already heard, Gloucestershire police have had to increase the precept by 19 per cent. That makes it look as if it is a local problem, when it is not. Also, the chief constable has told all the Gloucestershire Members of Parliament that cuts are having to be made in operational areas. Is that what the Government intended? I do not remember their claiming at the election that there would be cuts in the operational services provided by the police. The Minister must look at what is happening on the ground and not just at statistics which may appear to be okay on the surface, but do not reveal all that happens in the policing of counties.

Ms Hazel Blears: I am delighted to have a further opportunity to speak on policing, police funding, police numbers and the Government's drive to tackle crime. It is the top issue for the people in my inner-city constituency. I believe firmly that unless we tackle the problem of crime and disorder, all the other social exclusion initiatives on which we are engaged will not be as successful as we would like. If people do not feel safe and secure in their communities, all our other measures to provide jobs and opportunities will not yield the results that we want.
We need some facts in this debate. Over the next three years, the Government will be spending an extra £1.25 billion, which has been gained from the comprehensive spending review. In addition, there is an


extra £400 million for crime reduction projects, extra funds for CCTV partnerships between the police, local government and business to try to tackle crime, a major anti-burglary initiative and anti-car crime projects. We have set rigorous targets because we want to see the outcomes.
It is all very well to talk about perceptions, feelings and ideas, but what really matters to the people whom I represent is whether we are preventing, reducing and detecting crime and locking up those who commit crime. We aim to cut vehicle crime by 30 per cent. by the year 2002. That is a tough target, but the Government do not shy away from tough targets because they know how important those issues are for local people. There is no point spending money without tying it to targets. I know that the Conservatives have recently become a tax-and-spend party, but I do not see any point in spending money without the right outcome.
We must not forget the Tory record. I know that it is uncomfortable to be reminded of it, but, under the Tory Government, recorded crime went up from 2.5 million cases in 1979 to 4.5 million cases in 1997. Constituents such as mine bore the brunt of those crimes. A total of 40 per cent. of crime in this country happens in 10 per cent. of areas, and 4 per cent. of people are the victims of 42 per cent. of crime. Those are staggering and scandalous statistics and we must tackle them.
Under the previous Administration, the figures were up for violent crime, burglaries and assault. Crime and disorder was out of control, with young men running wild on estates, making people's lives a misery. The Government's plan to tackle all that is one of the top issues for the whole community.
We are beginning to tackle those problems. The hon. Member for Beckenham (Mrs. Lait) accepts that intelligence-based policing is the way to tackle crime, detect crime and ensure that convictions are secured, but I ask Conservative Members to use their brains and recognise that, in addition to intelligence, we have to use a little creativity and imagination. The Conservatives appear to be on a tramline of thinking that the only one way to tackle crime is to increase the number of bodies, but I want to increase the number of brains in our crime and disorder system as well.
Let me give some examples of new projects that are being carried out in my city to try to get maximum added value from our investment. Crime reduction partnerships bring together local government, the police, the business sector, the chamber of commerce, voluntary organisations and the local community in an effort to identify the problems of crime and how best to work together to tackle them. Are the police always right for a certain job, or could it be done better by, say, the housing authority? Is it better to bring in the youth service to intervene early in youth crime, rather than always look to the police to provide solutions? Without that partnership, we shall be unable to sustain the regeneration that we all want.
We have also drawn in resources from other areas, through projects such as Operation Victory, which has taken place in Greater Manchester in the past few months. It is the biggest police operation that Greater Manchester has ever known: in Salford, Trafford and Manchester on one day, more than 65 people involved in burglary,

handling, theft and the laundering of drug money were arrested. It was a massive operation and, not only did it succeed in taking those people off the streets and locking them up—which was a great relief to my constituents—but it sent a message to the community that they could have confidence that the police were able to tackle those problems and that we are not sitting back and allowing ourselves to be overwhelmed by a wave of crime.
We are going out there, tackling crime and using our intelligence. The information used in Operation Victory was gathered over a period of 12 months—the operation was not here today, gone tomorrow. In often difficult and dangerous circumstances, officers gathered evidence and information to use in prosecutions.

Mrs. Lait: Will the hon. Lady tell me what is the difference between Operation Victory and Operation Bumblebee, which was instituted in the mid-1990s and which achieved exactly the same ends? Is not Manchester's action a little late?

Ms Blears: Not at all. Operation Victory was incredibly successful and, although similar programmes have happened before, it was the largest programme yet, being carried out on such a scale that the impact on the community was enormous. It was an excellent project.

Mr. Ian Bruce: The hon. Lady is extremely enthusiastic and we love to hear such enthusiasm. However, my son is a police officer in the north of England and I have to tell her that her speech seems to reflect more closely the views of the Treasury than those of police officers on the beat, who know about their lack of resources and overtime and their resulting inability to get out there and do all that the hon. Lady wants them to do. Will the hon. Lady go back and listen to police officers in her constituency rather than to the Treasury?

Ms Blears: I assure the hon. Gentleman that I listen to police officers in my constituency. Three weeks ago, as the local Member of Parliament, I personally called a crime and disorder forum in my constituency, because I believe that we have a role to play in crime and disorder partnerships. I called together the police, the voluntary sector, business, social services and the youth service to meet me and talk about the new Crime and Disorder Act 1998. I asked them to tell me whether the Act is working and what the difficulties with it are. I asked how best we could institute the anti-social behaviour orders and what sort of protocols were needed to get the evidence to enforce the orders.
I am in daily contact with local police officers. They have inner-city beats, which is hard and challenging work—yes, it is tough out there. However, we have just introduced sector policing, whereby officers are responsible for their own neighbourhood and so are in close, daily touch with their communities. They monitor crime, know where the criminals are, and are able to direct resources into tackling crime in their own neighbourhood. I completely support local police officers, who have a demanding, difficult and challenging job.
We are trying to ensure not only that police officers have the resources that they need, but that they use them in such a way that they get results. If we do not, we are just sending them out on the streets, they do not get results


and they see the same criminals day after day, making the same people's lives a misery. The Labour Government's policies are about using intelligence and creativity to give police officers the tools to do the job.
The other example of local action in my city is a massive truancy project. I feel passionately that instead of spending our money on mopping up the results of failure, we should prevent that failure from occurring in the first place. In 1997, 40 per cent. of burglaries, 25 per cent. of robberies, 20 per cent. of thefts and 20 per cent. of criminal damage were committed by children aged 10 to 16. Those children should be in school. We have set a tough and challenging target—that, by 2001, exclusions from school will have been cut by one third—and backed it up with £500 million of extra resources.
We have to consider more than police funding. Look at all the extra resources that are being put into education through education action zones and truancy projects; that will help to prevent crime. Look at the money for the new deal, which gives young people the opportunity to work rather than become involved in crime. The Opposition have a one-track mind and do not see all the different parts of the jigsaw that is being assembled by the Labour Government. Four hundred thousand more people are now in work than were in work under the Tories. The hon. Member for Beckenham recognises the link between unemployment and crime: having more people in work means less crime on the streets.
The Government have set tough targets for efficiency savings, but those savings are being made. The briefing from the Association of Police Authorities—the very people who constantly ask for more funding—states:
this year alone, cashable efficiency savings have been identified totalling £107 million…an additional £75 million of expenditure has been redirected into frontline policing activities.
That is what my constituents want to hear—resources redirected into reducing crime, detecting crime and convicting criminals. If the Government are able to shift the emphasis from simply having bodies on the street to intelligent policing that actually reduces crime, the people whom I represent who are repeat victims of robberies, burglaries, assaults and theft will be mightily relieved.
I acknowledge the points made by the hon. Member for Beckenham about pensions. We have to tackle that issue. Nationally, about 13 per cent. of revenue budgets are eaten up by pensions; in Greater Manchester, that figure is 20 per cent. That cannot be allowed to go on. The Government must tackle the issue of pensions.
I believe that the best way to get added value from the resources that we put in is to work in partnership. It is easy to quote statistics and figures, but, in communities such as mine, we are only now beginning to count the true cost of the policies of the previous Government. Conservative Members do not like to hear it, but crime, unemployment, poverty and the breakdown of family life are the true price of Tory government. That is the Tory record, and my city is counting the cost. If the Labour Government are able to tackle crime and make Salford a safer place for people to live, work and bring up their family, we shall have done a great deal. I believe that the Government are up to the task.

Mr. Richard Allan: I congratulate the hon. Member for Beckenham (Mrs. Lait) on securing a debate on police funding, which is one of the Liberal Democrats' main home affairs hobby horses. We need to move the debate on from the well-worked theme of whether there is a direct correlation between funding and police forces' effectiveness. I do not believe that there is such a direct correlation, but to suggest that there is no correlation at all between police funding and police numbers is ludicrous.
It is strange and interesting to hear Labour Members argue that tight public spending settlements lead to efficiency savings and improved services—a view that differs from that which was expressed for many years by their colleagues in local government. In fact, their local government colleagues are still expressing that view, even thought they now have to do it quietly, for fear of embarrassing the Government. We might hear next that the Government decline to abandon local government capping, but merely intend to replace it with a slightly more complex system of capping. Instead of allowing local government to spend what it needs to, perhaps it will be suggested that more efficient social services or education services would be the result of tight and challenging settlements.
I should like to touch on the issue of police numbers, especially the number of special constables, which is of particular concern to the Liberal Democrats. I shall also refer to funding pressures, some of which have already been mentioned and about which the police are extremely concerned. I shall also briefly explore the Government's longer-term strategy, especially in respect of private security. It would be helpful if the Minister could clarify comments heard in recent months about the role of private security which appear to be a response to a Government squeeze on funding. It is important that we explore those issues before policies emerge that cause us even greater concern.
The number of full-time police officers has fallen by 1,043 since the general election. We have heard various arguments about whether or not that is a problem. When the Labour party was in opposition, it was ingenious in not giving a specific commitment on numbers, although it gave a clear general impression that it was concerned about the falls in numbers under the previous Government, and launched attack after attack on them. It can now get out of that one by saying that it gave no specific commitment to increase the police numbers so the new falls are acceptable.
The number of special constables has fallen by 3,250 in two years. That is a 16 per cent. fall from 19,500 in March 1997 to 16,500 in March 1999. I know that the Minister has a particular concern about special constables because he said in January:
Today's special is a police officer trained to professional standards commanding full confidence of regular colleagues and the public.… We believe this is an excellent use of a valuable resource available to chief officers and support this continued development of the Special Constabulary for the foreseeable future.
It gives us concern, and I hope that it concerns him, that we have seen a fall in numbers at a time when the Government seem to advocate increased use of that resource.
The Liberal Democrats would like to see an increase in police numbers. We suggest an increase of 6,000 as a useful way forward. The Government have helpfully


costed our proposals in answer to a parliamentary question from one of their Back Benchers. In a written answer on 6 July, they said:
The estimated annual cost of 6,000 additional constables would be around £150 million."—[Official Report, 6 July 1999; Vol. 334, c. 487.]
That would work out at about 5p a week for every citizen, or less than a penny a day. I feel that people would be willing to pay that to have an extra 10 constables in every constituency. People can relate to less than 1p a day and they would be happy to stump up.
We should not talk simply about a conflict between intelligence-led policing and police constables on the ground. There is a possibility of both if people are willing and able to pay. It is valid and legitimate to put it to the public that we need both to combat crime effectively by intelligence-led policing and to combat the fear of crime by providing uniformed officers as a point of contact. The two are not mutually exclusive. I should like us to consider funding both.
I am hesitant to talk about falls in numbers in any area, having heard from the hon. Member for South Dorset (Mr. Bruce) how intelligent our criminals are these days. I fear that they may browse through the pages of Hansard, discover where police numbers have fallen, and target their efforts there. I hope that the hon. Gentleman sees no influx of politically astute criminals into Dorset, although that may be one way to describe his campaign team.
I hope that the Minister will respond to the report published by the police service expenditure forecasting group in June. If he does not respond to Opposition concerns, he must respond to the group's comments that
the revenue support grant settlement for 1999/2000 was insufficient even to meet inflationary pressures and other spending commitments. In itself, it provided no scope for investment to improve service quality and deliver.
That is the view of the professionals. They have made an assessment, and given us their honest opinion that the pressures are significant and are causing police forces problems in delivery of services.
The group has suggested that police forces have a particular problem with long-term projects such as the public safety radio communications project. We need to examine funding for such projects. The PSRCP will cost £23 million next year, but I understand that, as it rolls out in the following three years, it will cost even more. My force in South Yorkshire says that a major alarm bell is ringing on that issue. It simply does not have the money. There are two possible ways forward, both of which would be a problem. The first is to go forward with the full expenditure and cut front-line services. The second is not to take up all the options within the project, in which case the force will end up paying for a more expensive system without deriving all the benefits because it cannot afford the total package. The Government must look into that.
Pension changes are likely to cost more than £64 million next year, but concerns have been expressed that the changes needed in the pension system may end up costing more rather than less in the short term. We need to be assured that the Government are willing to make the changes in a way that does not impact on front-line services, given that the changes need to be made.
It has been estimated that the Crime and Disorder Act 1998 will cost about £15 million in the next year. We have welcomed the Act. The hon. Member for Salford (Ms Blears) referred to initiatives such as crime and disorder partnerships. We are fully behind such initiatives, but there was an expectation that the Act would be revenue neutral in its impact on the police. Yet I know from my police force that it is putting a significant amount of senior officer time into it. That is quite proper, but it gives the police a short-term funding pressure estimated at £15 million over the next year. That is £15 million well spent, but I hope that we shall not simply ignore the police authorities when they say that the legislation is costing them more than expected.
We must also take into account specific events such as the millennium. Police forces have flagged up a serious problem in funding police support over that period.

Mr. Paul Keetch: Certainly, the West Mercia constabulary has expressed to me its concerns about funding police support at the millennium. However, the millennium is a foreseeable event—we have known about it for 1,000 years. Does my hon. Friend agree that the policing of unforeseeable events such as the demonstration at Consort Kennels in my constituency by animal rights activists places enormous additional burdens on the police? That demonstration diverted police officers away from their normal activities. The police do not believe that they receive adequate Home Office support for unforeseen events that crop up from time to time.

Mr. Allan: That is a general problem. In my constituency, we had the tragic circumstances of the Hillsborough disaster. Continuing legal battles are costing the police service money. It is receiving conflicting advice. It is a huge political minefield, but, whoever is right or wrong, the police have faced unexpected expenditure. The demonstrations at Shoreham also created a policing requirement. We do not want local police forces to feel that they cannot provide the required level of policing. Some form of ability to respond would be helpful.
We accept that efficiency savings can be made in the police force, but we do not accept the Government's denial that there is any problem. The hon. Member for Salford referred to an increase of £1.24 billion over three years. The Government's comprehensive spending review presentation has been wonderful. They announce, announce again and then announce again. They multiply any figure by three to give a better appearance to their public spending figures. However, when we unravel the Government's ingenious accounting methods, we find that the increase over three years is £675 million, not £1.24 billion.
We should consider funding over the whole Parliament. We were critical of the Government for accepting Tory spending limits. The House of Commons Library has shown that, over the Parliament, there will be no real-terms increase in central funding for the police. In 1998–99, there was a real-terms fall in central funding for the police. That was only the second time that that had happened in 20 years.
Police force reserves are another problem. Police forces often dip into their reserves for specific events, such as the millennium. That increases the overall cost to


the force. The Chartered Institute of Public Finance Accountancy has shown that 11 forces are now running reserves below the recommended level.
The hon. Member for Salford said that police officers faced challenging times. That was also the word used in the Home Office press release on its spending settlement. It said:
This is a fair but challenging settlement for the police".
Everyone who has watched "Yes, Minister" knows that "challenging" is a Whitehall euphemism for "much lower than needed". One could say that local government had challenging settlements from the Tory Government in the past 18 years, and we know what impact that had on it.
We do not accept that there is a one-to-one relationship between funding and improvements in the police service, but we do not accept that there is no relationship whatever. That point is important and needs to be examined.
I wish to refer to the future direction of the police force. It is not a total coincidence that, at a time of tight police funding and falling numbers, the Government have opened the debate about the future of police patrolling. We are concerned about the Government's intentions. The Home Secretary has openly welcomed and encouraged the debate about the role of private security in patrolling the streets, and he has made public comments to that effect. We do not wish to see the private security industry ignored, as it has a significant role in private spaces, such as shopping centres, where one can define clearly who is responsible for that space and who should properly pay for the security.
There is a difference between that situation and sending people out on patrol, and we are concerned by talk about private security officers patrolling estates. There are two distinct services. Police forces are made up of accountable, professional, trained, disciplined and sworn police officers, who provide a distinct public service. Private security officers—we regret that the Government have not moved further on regulation for them—do not conform to the same disciplines. I hope that the Minister will indicate that there will be further regulation for private security officers.
The Government must ask themselves the crucial question—if private security provides a cheaper service, why is it cheaper? We believe that it is cheaper precisely because the industry does not have to maintain the same standards as the police. There is a lower quality, in that the industry is not an accountable public service with sworn loyalty to the Crown. I hope that the Government will make it clear that it is not their intention to civilianise police patrols. While there are proper arguments for civilianisation of non-front-line policing functions, we believe that they do not apply to police patrolling.
I hope that the Minister will respond to some of the specific concerns about funding issues, identified by the police agencies, and to some wider policy issues. That would shed far more light than simply repeating the mantra of the over-inflated and oft-repeated comprehensive spending review figures.

Mr. Steve McCabe: First, I apologise to you, Mr. Deputy Speaker, to the hon. Member for Beckenham (Mrs. Lait) and to other hon. Members for being unavoidably detained and missing the start of the debate.
I will make a brief speech, concentrating on two themes. First, the West Midlands police force—one of the largest in the country—is not suffering under the misapprehension that it has had a resource cut; in fact, the budget for 1999–2000 shows a total revenue expenditure increase of about 2.3 per cent. It is significant that, in its budget planning, the West Midlands force has been able to put an extra 50 constables out on direct patrol on the streets. It has been able to do that because, as in Manchester—as my hon. Friend the Member for Salford (Ms Blears) explained—the force is engaged in a radical exercise in sector policing, which is designed to cut out wasteful bureaucracy in the police force.
The West Midlands police force has the highest percentage of constables to other ranks in the country, and the lowest management costs in the country. That theme is extremely important in terms of police funding.
As resources are made available, there are particular aspects of policing and projects to which we would like to see more money directed. Personally, I think that there is more scope for the use of technology in DNA processing, which would be an investment worth making. It is important that we get value for money. The key to that is to reduce management costs and to get a greater ratio of constables to other ranks.
The hon. Member for Beckenham said that numbers matter, and I understand her point. However, it strikes me as significant that the Audit Commission reports have pointed out consistently that, even where the numbers are high, there are forces which, at any one time, can call on only 5 per cent. of their total force to patrol the streets. One must ask what kind of organisational structure pertains where, out of a force of huge numbers, only 5 per cent. are doing active policing. The lessons from Manchester and the West Midlands must be taken on board by other forces if we are to get greater value for money and efficiency.
My second point was touched on by my hon. Friend the Member for Stroud (Mr. Drew). In this day and age, it is difficult to understand how it can be reasonable—with all the amazing technological advances, and the inevitable costs that they impose—to have 43 police forces spread throughout the country, ranging in number from 950 officers to 29,000. We have 43 authorities that are duplicating the costs of chief constables, personnel departments, research and development departments, payroll departments and purchasing departments. That seems to me to be an extraordinary waste of money.
I would not urge my hon. Friend the Minister to take direct action to compel forces to reduce overall numbers, or to rationalise the size of police forces. However, where improvements can be made by sharing at least some of those activities, there is scope for amazing cost savings, and that would be a significant step forward. I would particularly like to see a regionalised police force—the time has come when we can afford to reduce the number of forces from 43.
I am not concerned now with the question of a democratic deficit because of two significant developments. The first is sector policing. Local superintendents are now accountable to the local population, so there is direct democratic accountability. That is the great strength of sector policing. The second development is that the introduction of police authorities


in itself removed directly elected accountability, in the way that it was understood traditionally. Having made that step, we do not need to rehash the old argument.
We must look for the maximum efficiency for the money we put in. That cannot possibly be achieved by 43 authorities that are duplicating every activity endlessly, and are wasting money on bureaucracy that could be spent on patrolling the streets and protecting people from crime.

Mr. Robert Syms: I could not disagree more with the hon. Member for Birmingham, Hall Green (Mr. McCabe) about police forces. Dorset is a relatively small force, but it is efficient and commands public support. I do not wish to see vast county or regional forces, or a national force. The British system of doing things, with a degree of local accountability, is the best. The county forces, including some of the smaller ones, have a good record. Problems have tended to occur in some of the larger forces, particularly the West Midlands force and the Met. The smaller forces have delivered a good service over the years.
I wish to refer to the overall concern about funding and numbers. I know that "more funding and more numbers" is not the only answer, but it helps in terms of the management of the police. The hon. Member for Salford (Ms Blears) made an intelligent speech—apart from her political points at the end—and made some good points. However, the reality is that, in Dorset, we are struggling with pensions—as are all forces. Over the last 10 years, police pensions as a proportion of budgets have risen from 7 to 13 per cent—an added strain without additional budgets. That is a problem with which all Governments have had to deal.
Apart from pensions, there is the problem of the millennium, which—as the hon. Member for Hereford (Mr. Keetch) pointed out—is a predictable event. Major public services, whether police or hospitals, will have to make extraordinary arrangements to deal with that.
The Association of Chief Police Officers has said that the Crime and Disorder Act 1998 will cost £20 million. Much of that Act has been welcomed by my local force, and it may have a positive role to play in policing. However, there are resource implications that have not been addressed fully within budgets.
The fear of crime must be addressed. People are reassured when they see bobbies on the beat. I have a well-developed network of neighbourhood watch groups in Poole, whose members are extremely good at getting on to the police and asking, "Where are the bobbies on the beat? What is going on?" We should pay attention to the public relations aspect, which is particularly important to older constituents.

Mr. David Lidington: I congratulate my hon. Friend the Member for Beckenham (Mrs. Lait) on securing the debate and introducing it with such skill. Although there are undoubted differences between hon. Members across the Floor of the House, all of us, regardless of party, are united in acknowledging how much we and our constituents owe to the professionalism, dedication and constant vigilance of our police service.
My hon. Friend sensibly drew attention to the fact that there is no straightforward correlation between police numbers and police effectiveness in tackling crime. However, like my hon. Friend, other hon. Members pointed out that police numbers do matter.
For example, as the hon. Member for Stroud (Mr. Drew) and my hon. Friend the Member for Tewkesbury (Mr. Robertson) noted, it is a matter of concern, especially to people in rural areas, that they may at times have to rely on a response time target from a relatively remote urban centre, rather than having officers on duty, particularly over the weekend or through bank holidays, in the police office or police station in their own village or market town.
The hon. Member for Salford (Ms Blears) demonstrated all the passionate, born-again zeal for tight budgets that one would expect from the Parliamentary Private Secretary to the Chief Secretary to the Treasury. With a cut of 113 police officers in Greater Manchester since the general election, I am not surprised that she steered clear of that subject.
More generally, there is a difference between a considered decision by a chief officer to deploy more of his officers to intelligence gathering, problem-solving policing, surveillance and targeting known villains and repeat victims—for which there would be support across the House—and chief constables and police authorities feeling compelled to reduce the numbers on their establishment below the level that they would regard as satisfactory, simply because of budget constraints resulting from spending decisions imposed by central Government.
The Home Office's figures show that there has been a reduction of more than 1,100 police officers since the general election. The biggest losers include London, where the figure is down by about 680; Sussex, where the figure is down by almost 240; and West Yorkshire, which has lost more than 200 officers. Of the 43 forces in England and Wales, 29 have cut their police numbers since 1998.
The Government's priorities for spending were made clear in their comprehensive spending review. The figures that I have seen suggest a cash increase of 2.7 per cent. in the current year, plus the hoped-for efficiency savings. Over the lifetime of this Parliament, the Government's published spending plans involve real increases of no more than 0.7 per cent.
As four fifths of police expenditure goes on pay, a tight budgetary settlement inevitably means that there will be an impact on manpower. That has been recognised by the Association of Chief Police Officers, the Association of Police Authorities, the Police Federation and the Police Superintendents Association, which have all vigorously drawn attention to the fact that such a tight settlement will make it extremely difficult for them to deal with the priorities that they have been set by the Home Secretary, and to provide the quality of service that they want to give to their local communities.
ACPO has said that an increase of 6.1 per cent. in police spending is needed in order to stand still in the provision of service. If the Government disagree with ACPO's assessment of necessary expenditure, I hope that the Minister, in his response or in writing subsequently, will spell out in detail the methodology that the Government have used to reach a different conclusion from that of ACPO.
As time is short and to enable the Minister of State to respond, I shall concentrate on three topics related to resources, on which I hope the Minister will comment. The first topic is patrols. The hon. Member for Sheffield, Hallam (Mr. Allan) expressed concern about problems affecting the special constabulary. The Minister knows that there has been considerable disquiet among police officers at the idea that, partly as a consequence of constraints on resources, the Government may be considering greater reliance in the future on ancillary citizens patrols or private security patrols of some sort.
Concern about that is not confined to those on the Conservative Benches. A Labour peer, a distinguished former officer, Lord Mackenzie of Framwellgate, warned in another place of
substitute, second tier public or private patrols, which certain chief constables are flirting with."—[Official Report, House of Lords, 21 June 1999; Vol. 602, c. 723.]
We on the Conservative Benches have no problem with voluntary initiatives in support of the police. Neighbourhood watch was a great success story of the 1980s, and I am delighted if those on the present Treasury Bench have been converted by my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) to the advantages of "walking with a purpose". It is always pleasant to see Labour Ministers swallowing the words that they expressed in opposition.
What powers would those patrols have? Would those on patrol hold the office of constable? What would their relationship be to the police? Would there be disciplinary procedures if the powers of those patrollers were abused?
The second topic is pensions. The inspectorate of constabulary concluded that police pensions will cost about 14 per cent. of police expenditure by the financial year 2001-02. It is just over a year since the Home Office published its consultation document on police pensions. Lord Burlison, another distinguished Labour peer, said in another place:
We intend to publish soon specific proposals on the future of police pensions."—[Official Report, House of Lords, 21 June 1999; Vol. 602, c. 737.]
I hope that the Minister will tell us how soon that document will be published and over what time scale the proposals will be implemented.
My final point concerns the public safety radio communications project—PSRCP—to which other hon. Members alluded. I am sure that the Minister of State is aware of a letter of 17 June from the chairman of the Association of Police Authorities, Dr. Henig, to the Home Secretary, in which she wrote.
It is already clear…from the indicative prices that many authorities will face very serious problems if the full cost of this service is to be met from existing funding allocations.
She continued:
The police service cannot afford to finance PSRCP within the existing level of police grant, without a direct effect on the availability of officers for frontline policing.
My own authority in Thames Valley told me that its estimates suggest that the reality of absorbing PSRCP costs within current baselines set by the Government would result in the need to reduce police officer strength by 167.
I hope that the Minister will be able to give answers to some of those questions. He and his colleagues now have the responsibility for making budgetary decisions and

setting priorities for a service that all of us in the House support. I hope that he will deal with the concerns that have been expressed not merely by hon. Members in the Opposition parties, but by senior representatives of the police service.

The Minister of State, Home Office (Mr. Paul Boateng): This has been a useful and largely good-humoured debate. I congratulate the hon. Member for Beckenham (Mrs. Lait) on raising an important subject that the whole House will want to be tackled. She was wearing her sensible shoes today; to be fair, she always does. Unfortunately, those sitting behind her—the bovver boys of Dorset and of the New forest—were determined to put her off track. They were true to form; she rightly talked about the importance of sophisticated argument and sensibilities in respect of numbers. The hon. Member for South Dorset (Mr. Bruce) knows nothing of sophistication, and sensibilities are hardly the stock-in trade of the hon. Member for New Forest, West (Mr. Swayne). We heard from them a crude party political response to the debate which did them and their party no service whatever.
The truth is that the Government have made available to the police resources far over and above those made available by our predecessors. The figures speak for themselves: estimated total revenue expenditure on the police service in England and Wales for 1999–2000 is £7.426 billion—an increase of £225 million, or 3.1 per cent., over 1998–99. Let us look at police numbers in the constituency of the hon. Member for Beckenham. Police numbers fell between March 1992 and March 1998—by an average of more than 340 officers a year on the basis of a Conservative budget in each and every one of those years—and the Metropolitan police lost 2,060 officers throughout that period. We have stabilised the position and the Met lost only 21 officers in 1998–99. Those are the facts and she must give credit where it is due. Under the Government whom she supported, police numbers fell by more than 340, year on year.
The hon. Member for South Dorset complained about the budget of the Dorset police, but it has increased in the current year by 5 per cent., or £77.4 million, which is above the national average of 3.1 per cent. The people of Dorset would not have had that money spent on policing had his party been returned to government. It was not returned to government and, as a result, expenditure on police in Dorset is greater than under our predecessors.

Mr. Ian Bruce: Will the Minister give way?

Mr. Boateng: No.
The hon. Member for Tewkesbury (Mr. Robertson) also complained, saying that the presence in the Chamber of three Members representing Gloucestershire seats showed that Gloucestershire's police funding was in crisis. On the contrary; that is a sign of diligence, not of crisis, and it is no accident that the Conservatives were outnumbered. One Conservative and two Labour Members representing Gloucestershire seats were present, and the House can draw its own lessons from that. The contributions of those Labour Members, as well as those of my hon. Friends the Members for Salford (Ms Blears) and for Birmingham, Hall Green (Mr. McCabe), recognised the real gains being


made in policing on the ground resulting from the Crime and Disorder Act 1998. Those gains were reflected in the intervention of my hon. Friend the Member for Gloucester (Ms Kingham).
All my hon. Friends recognised that the 1998 Act has provided a totally different context for policing and the reduction and prevention of crime in our country, and that it has enabled partnerships to be established on the ground. The hon. Member for Poole (Mr. Syms), who wears his sensible shoes on almost all occasions, was good enough to give due credit to all those good folk in Dorset who are taking advantage of that Act, which the Labour Government passed, to build effective partnerships between the private and public sectors, which is the best way of bearing down on crime and disorder.
We heard the usual Liberal rant from the hon. Member for Sheffield, Hallam (Mr. Allan): money, money, money, money, more resources, more resources, more resources. Some absurd figures were picked out of the air and it was suggested that if only we would take another penny out of our pockets and give it to the police—it could have been two pennies, but one never knows with the Liberals—all would be well and police officers would suddenly spring up like dragon's teeth. My response is that he really must get real. Why are the Liberals so afraid of recognising the benefit that private-public partnerships can bring?
The hon. Gentleman attempted to raise the spectre of neighbourhood wardens as if the House should be frightened of them. The reverse is true and I am sorry that, in an otherwise unremarkable maiden Front-Bench speech on these matters, the hon. Member for Aylesbury (Mr. Lidington) saw that same spectre. He suggested that neighbourhood wardens somehow presented a threat to traditional policing values. They do no such thing, because community patrol and neighbourhood warden schemes do not provide substitutes for police officers. On the contrary; their role is to add value to the work of police officers, not to replace them. The benefits of that

are being experienced by local communities up and down the country. If the hon. Member for Hallam listened to communities more rather than always having the next edition of Focus in mind, his party would be much better sighted on these issues.
Two serious points relating to police pensions were raised by my hon. Friends and echoed on occasion by Conservative Members. We recognise the difficulties faced by police authorities—they are part of the poisoned legacy left to us after 18 years of neglect of these issues and this part of public policy. We have increased the proportion of revenue funding to be allocated on the basis of pension commitments to 14.5 per cent. in 1999–2000 in recognition of the increased burden of pension costs. I assure the hon. Member for Beckenham that we have been prepared to confront those difficult issues in our review of this matter.
There are no easy answers to the problem of the cost of police pensions, as my hon. Friend the Member for Salford said. We have not yet made final decisions on the detailed content of the firm proposals that we intend to introduce, but we shall do so shortly. The House will then have an opportunity to consider them, as will the police service and the wider community, in terms of the decisions that we shall have to take.
The public safety radio communications project is important because it relates to new technology, and to improving and enhancing police capacity in that area. Negotiations are taking place between the police information and technology organisation and BT, the putative contractor. They will soon produce outcomes and it will then be possible for us to consider a proper response to the funding challenges.
These are challenging times, but partnership between the police and the public—not simplistic solutions, but recognition of the importance of efficiency and effectiveness—is at the heart of our policies. If we recognise the complexity of modern policing, and if we do not accept simplistic answers to simplistic questions, we shall go forward successfully.

Grimsby Fish Market

Mr. Austin Mitchell: I hope that you are sitting comfortably, Mr. Deputy Speaker. I hope that my hon. Friend the Minister is also sitting comfortably, because I am about to retail a horror story that is worthy of the Hammer house of horror—apart from the fact that, in this horror story, Anglian Water plays the combined role of Baron Frankenstein and Count Dracula.
At the beginning of this year, the Grimsby fish merchants who buy and fillet fish in Grimsby's market—Grimsby's wonderful new fish market, I should say—received a shock. These merchants, who carry out what could be described as the primary process, were given estimates by Anglian Water showing the scale of the increase in charges that would take effect from June. The increase had been imposed to pay for the new treatment station at Pyewipe, which was to come on-stream in that month and, indeed, has come on-stream. The existing charge for Macklam's was £738 a year; it was to increase to £20,400—an increase of 2,600 per cent., at a time when inflation was running at about 2 per cent. The current charge for Arthur Bacon was £2,700 a year; that was to increase to £49,000, an increase of 1,735 per cent. The current charge for Cheek House was £7,000 a year; that was to increase to £63,500, an increase of 790 per cent.
Those horrendous increases were due to the urban waste water treatment directive, which requires urban waste water from coastal towns to be collected and treated prior to discharge by the end of 2000—next year, in other words. Grimsby was to have the pleasure of pioneering the measure and of paying the full charges 18 months before the deadline. That was because Anglian Water happens to have a new treatment station—originally intended to remove discharges deposited on beaches in Cleethorpes—which was planned and started before the directive. The station was to be financed by the charges, although what is discharged by the fish merchants—the primary processors—is organic biodegradable waste.
The Sea Fish Industry Authority tells me:
The direct discharge of this effluent to the open sea is relatively harmless, it simply returns the fish nutrients back to their origin.
Indeed, generations of fish in the Humber estuary and its environs have been reared on exactly such discharges. Anglian Water says that the discharges, although organic and biodegradable, are polluting; but that is only because they are mixed with human and other industrial waste before being treated. If the material were discharged directly into the sea—that would be possible, with consent, and it is being considered in north-east Scotland—there would be no threat of pollution.
Anglian Water imposed the charges on Grimsby before imposing them on any other fishing port. I am talking about ports with which Grimsby is in direct and increasingly intense competition. For instance, it is competing with Hull for landings. Hull has no processing plant, so no charges will be imposed in that regard—if, indeed, charges are imposed at all. If they are imposed, they will be imposed in 2001, or perhaps later. Grimsby must also compete with north-east Scotland and parts such as Aberdeen and Peterhead. As my hon. Friend the Member for Aberdeen, Central (Mr. Doran) will know, the North of Scotland Water Authority intends to set up a

plant under the private finance initiative, but bids will not come in until next year and we do not know when the plant will be completed.
The competition is intense. Because of the shortage of fish, Grimsby market's throughput has fallen by 25 per cent. since its establishment. The problem is that this is a mobile industry. The merchants and traders can do their business anywhere. Grimsby merchants buy in Hull; Hull merchants buy in Grimsby. If there is a threat of much heavier charges in Grimsby, the merchants will simply transact their business elsewhere.
Fish can be landed anywhere. Why should they be landed in a place where charges will be so much higher than they are in every other fishing port?
The strength of Grimsby market lies in the fact that a large number of merchants are competing, and they set good prices. The competition sets good prices. If a substantial proportion of merchants go bust because of these charges—20 or more firms may go bust—there will be less competition to set the prices. The possibility of bankruptcy is imminent for several. Anglian Water says that the increase amounts to no more than 1 per cent. of annual turnover, but the Sea Fish Industry Authority estimates that in 1994 processors' profit amounted to only 1.5 per cent. of sales, so most of the industry's profit will be eliminated by the charges. Bankruptcies will result, and firms will go under.
Grimsby's ability to set a good price will be lessened, as will its attraction in regard to fish landings. The charges will deal a blow to our competitive position in the United Kingdom, and, when they are imposed everywhere—as they will be—will deal a blow to the competitive position of British fishing, as opposed to the European position. The directive leaves it open, but I have no doubt that if charges are imposed everywhere, they will not be imposed in the same heavy-handed fashion elsewhere. Other countries do not have the hard-nosed water companies that we have.
Other countries are helping their fishing industries to adjust. Denmark, for instance—

Mr. Bob Blizzard: Will my hon. Friend give way?

Mr. Mitchell: I will in a minute, when I will be making a point directly relevant to my hon. Friend's constituency.
Denmark is giving its industry relocation grants. France is giving its processors 70 per cent. grants to enable them to install treatment equipment in their plants; 35 per cent. comes from the chamber of commerce, while 35 per cent. is provided by European grant money. Other countries are coping without higher charges, and that will deal a blow to the competitive position of Grimsby and the British industry as a whole. It will also deal a blow to fishermen, because the cost of fishing will increase. Fish is already experiencing difficulties in the supermarkets. Demand is down because the price is up: people are turning to alternatives such as chicken. As a result, there is surplus capacity on the processing side. We are already seeing manufacturers restructuring and jobs being lost, and the charges represent a further prod in that direction, because they will increase the cost of fish in the supermarket.
As soon as this became known, I was confronted by an outcry. I began corresponding with Anglian Water. The joys of corresponding with Anglian Water must be


experienced to be believed: I really ought to publish the correspondence on the internet. It involves all the pleasure of corresponding with an "I speak your charge" machine that replies only, "We must do this in order to clean up the environment. Charges will go up. You will enjoy it later."
Anglian Water has pretty much refused to budge. It did agree that its initial sampling procedures, on which it has based its charges, were wrong. I am glad that it agrees about that because the procedures were wrong, so Anglian Water has made no great concession in that respect.
I arranged a meeting with my right hon. Friend the Minister for the Environment. He urged compromise. Anglian Water said, "In that case, we will start the charges one month later." That, too, was no great concession because Anglian Water could not have started the charges in June anyway. It also said that it would limit the increase this year to two and a half times the existing charge, or 250 per cent when inflation is 2 per cent., provided that the full charge—up to 500 per cent. for smaller merchants, which will amount to about £250,000 for one of our biggest processors, Bluecrest come in—next year, so Anglian Water gets the merchants into its net, and then closes the trap.
Anyone who protests about the charges is now being referred by Anglian Water to its legal department. Such is Anglian Water's desire for accommodation and compromise. There is still to be an increase of 2.5 times, and a damaging blow is still to be dealt to Grimsby—and it is based on inaccurate information. Samples of the effluent that is discharged vary widely. The Sea Fish Industry Authority has carried out checks, and its findings are very different from those of Anglian Water, whose findings from surveys and spot checks fluctuate wildly.
There is no legitimate basis for these charges. It is a basic principle that charges should reflect the actual costs. Anglian Water does not know the actual costs, and it therefore has no legal or reasonable basis for the charges.
There has been no co-operation with the Fish Merchants Association, because Anglian Water has been unhelpful on the "divide and rule" principle. Indeed, Ofwat wrote to me on 28 June saying that
Anglian Water did not properly consult fish merchants". properly.
That was a crushing indictment of Anglian Water.
Fish merchants have had no time to implement changes in their procedures to reduce effluent. All sorts of changes could be made, but they all take time, investment and planning. Merchants could use less water—which they use at the behest of their customers, who want the product to be clean and not to be filleted in dirty water—or they could arrange for primary treatment of effluent, or they could remove solids, which could be collected by the council. The big processors could construct a dissolved air flotation plant—which would cost £250,000, so it really is only for the big boys. Consents for direct sea discharges could be obtained. Small business men could be grouped, so that they might better cope with the charges or install plant to reduce effluent.
The Sea Fish Industry Authority is prepared to advise on alternatives; even Anglian Water could help and advise, but it has done nothing. The fact is that there has been no time to act on any alternative, because Anglian wants its money—its pound of fish—now.
The fishing industry in north-east Scotland has brought in environmental consultants—CORDAR—financed by local authorities, to tell it how it might reduce effluent and, therefore, the charges that it pays. In Grimsby, we have had no time to take similar action.
Anglian Water has not even considered the regulator's suggestions. The Environment Agency told me that
scope exists for Anglian to present an argument to OFWAT that Grimsby fish merchants are a special case and their costs should be phased in.
To which, in a letter to me, dated 6 July, Anglian Water simply replied:
Using the economic argument would set a precedent applicable to other groups".
Gosh—how awful it would be if people were able to contest charges on economic grounds!
On 7 April, the Office of Water Services suggested to Anglian that
charges should be delayed until waste minimisation and agreed sampling procedures have been put in place.
There was no response.
The Ministry of Agriculture, Fisheries and Food has finally been stirred, and realised that the charges will damage the industry. MAFF urged caution in applying the charges, which are only one of many burdens being imposed on the fishing industry. MAFF has received no response from Anglian on the matter.
Grimsby is on the front line of this issue, as all the other water companies are waiting to see what happens there before imposing their own charges elsewhere. Some companies, such as Yorkshire Water, are being a little more sensible about the issue. However, South West Water is proposing increasing water charges from 3'7p to £5 per cubic metre. North-east Scotland's pelagic industry is facing a 28-fold increase in water charges. Therefore, everyone is waiting to see what happens on the front line.
My hon. Friend the Member for Waveney (Mr. Blizzard) is interested in related events in Lowestoft, and I hope that he will lead the resistance to similar charging there.

Mr. Blizzard: Fish merchants in Lowestoft are watching the situation with great trepidation, as Anglian Water is just about to commence work, just north of Lowestoft, on a new sewage works, and we fear that the same charging regime may be imposed in my area. My hon. Friend has made the point very well that no business can face such crippling charges, and pointed out the irony that fish merchants' waste itself does not harm the marine environment.
I also tell my hon. Friend that my experience of Anglian Water is essentially the same as his—Anglian is arrogant and insensitive. Moreover, Anglian itself was recently fined £14,000 for polluting the beaches at Lowestoft, resulting in the loss of a European blue flag.

Mr. Mitchell: I am grateful to my hon. Friend for his intervention, which reinforces the argument.
I should also emphasise that these Grimsby merchants are new Anglian Water customers. Previously, Associated British Ports added 18 per cent. to its charges, and then divided up those charges and billed individual businesses. When ABP discovered the size of the charge increases, it decided to let Anglian Water cut out the middle man and


crucify its customers directly. Those Grimsby merchants are therefore new customers, for whom Anglian should allow a one-year moratorium in applying the new charges so that a proper and legal charging basis may be agreed, and customers advised on how to reduce charges. After the moratorium, the new charges could be phased in.
I also ask the Government to consider how they might assist the British fishing industry, the competitiveness of which is being affected by a massive increase in charges. Our industry needs help and support which has been made available in Europe, but not in the United Kingdom. Something has to be done to encourage our industry. It needs encouragement and advice on training, and proper investment in new procedures to reduce effluent—which, consequently, would reduce bills. I am sure that no other European Union member state would insist that the new charging regime should be implemented as fully and rigorously as Anglian is trying to do.
Despite the temptation—as hon. Members will see, I am labouring under strong feeling on the issue—I shall not apply John Edmond's two-word description, one word of which was "greedy", to Anglian Water. I do not want to call Anglian greedy—its behaviour will prove whether it is. Nevertheless, Anglian Water has the power to do anything. It has the power to establish a moratorium and to phase in the charges gradually. It should exercise its power for the benefit of our fishing industry, which has been very hard hit, and to create good relations with its customers. It is a monstrous and unforgivable tactic for Anglian to use its legal department to threaten customers who express doubts about the size of the charge increases.
Anglian Water's only defence is but a sophisticated form of the Nuremberg defence. Anglian tells me, "We're improving the environment—everyone wants that". Anglian said:
We are merely seeking payment for the services we are providing".
The Nuremberg defence was, "I have killed you for your own good and for the good of others", and Anglian has taken the same line.
Our fishing industry accepts the need to clean up the environment. It has cleaned up its own environment by using an enormous amount of water. However, it cannot absorb such a huge increase in charges. We are not at the 11th or the 12th hour—it is 12.30. Nevertheless, I tell Anglian Water that the charges will be resisted. I cannot advise merchants to pay the charges, or say, "You've got to behave reasonably towards Anglian Water because Anglian has behaved unreasonably and inconsistently towards the fishing industry."
I tell Anglian Water this, "If you persevere in blind, unaccommodating, inconsiderate and greedy behaviour, you will irreparably damage the fishing industry and—specifically, and in advance of the rest—the Grimsby fishing industry. You'll kill the goose that lays your golden eggs. If you do that, I'll not forgive you, Grimsby will not forgive you, and the fishing industry certainly won't forgive you."

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Alan Meale): I congratulate my hon. Friend the Member for Great Grimsby (Mr. Mitchell) on securing this debate. It is a very important debate not only because of the

importance of the United Kingdom fishing and food processing industries, but because of the importance of the communities in the areas represented by my hon. Friend and other colleagues in the Chamber.
I pay tribute to my hon. Friend, but also to other Labour Members for attending the debate. It is noticeable that only Labour Members have attended this very important debate on an issue affecting not only Grimsby but many other fishing communities across Britain. I am sad that Opposition Members have not bothered even to be here.
My hon. Friend has a long history of supporting and expressing the concerns of the fishing industries. I remember that, long before I was elected to the House—even before my hon. Friend was a Member of Parliament—in the mid-1970s, he was campaigning on issues affecting the fishing industries. Similarly, some of my other Friends in the Chamber, in their short time in the House, have expressed in the House concerns about food processing and fishing companies in their constituencies. My hon. Friends the Members for Scarborough and Whitby (Mr. Quinn), for Waveney (Mr. Blizzard) and for Cleethorpes (Shona McIsaac) persistently raise their concerns. My hon. Friend the Member for Aberdeen, Central (Mr. Doran) also raises matters of concern frequently, but fishing is a devolved matter in Scotland, and my hon. Friend the Member for East Lothian (Mr. Home Robertson), who deals with these matters in Scotland, is present in the Chamber.

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I ought to point out to the Minister, as the Chair has frequently had to do to hon. Members, that half-hour Adjournment debates are the property of the hon. Member who introduces them. They are not wide-ranging debates, and the absence or presence of other hon. Members has no significance for them. The debate is a matter between the hon. Member for Great Grimsby (Mr. Mitchell) and the Minister.

Mr. Meale: I appreciate that point, Mr. Deputy Speaker. I referred to my hon. Friends because of the enormous number of representations made to me before the debate. I realise that the debate is narrow and time limited, but I recognise the concerns of many of my hon. Members.
This is a serious matter, but I must disappoint my hon. Friend the Member for Great Grimsby by saying that the Government do not have the power to intervene in the charges set by Anglian Water this year. Under the law, we cannot tell Anglian Water what to charge. Neither Ministers nor Ofwat have the power to control charges, provided companies do not discriminate unduly and remain within price limits. Our only power—we have used it as best we can—is to encourage all parties to search for an agreed solution.
My right hon. Friend the Minister for the Environment recently met a delegation led by my hon. Friend. We have not been able to achieve an agreement, but I am more than willing to meet my hon. Friend, and others, to discuss their concerns. We shall use our best endeavours to gain some movement.
The Government value the fishing industry, and substantial grants for a range of improvements have been made to fish processors under the European Union fish processing and marketing scheme. Since the processing


and marketing and port facilities teams were launched in 1996, the Ministry of Agriculture, Fisheries and Food has made grant awards totalling more than £8 million to English fish processors, markets and fishing ports. The Sea Fish Industry Authority, which is sponsored by that Ministry, recently produced a 50-page guidance note on water and effluent minimisation, which has been sent free of charge to fish processors. The document contains guidance to fish processors on how to identify areas of wastage and minimise increases in costs.
We support the determination of our fishing industries to be fully competitive internationally. My hon. Friend suggested that we should do more than other countries to improve the environment, and he said that firms abroad receive financial help for environmental improvements. Each EU country supports its industries in different ways to suit local arrangements, but there are legal limits on assisting industries financially without falling foul of competition rules.
If my hon. Friend has any evidence that other EU states have supported their fishing industries beyond the limits of competition rules, it would be a matter for the European Commission to investigate. Other member states have different priorities and contribute different shares to the EU budget. Their fishing industries are in different stages of development and vary in their relative importance to national economies. It would not be appropriate to seek to match the spending of other countries in these areas. Spain, for example, receives a much larger allocation than anyone else, because of the size of the Spanish fishing fleet and the relative poverty of the areas concerned.
To provide decent services and to protect the environment, it is reasonable to expect all users of services to pay their way. In particular, charges should broadly follow the principle that the polluter pays. Producers—including the fish processing industry—of trade effluent hitherto discharged with little or no treatment have benefited for many years from relatively low charges.

Mr. Frank Doran: My hon. Friend mentions the polluter pays principle, but one of our major difficulties is that different water authorities apply the rules differently. The industry is highly competitive, and when my hon. Friend the Member for Great Grimsby (Mr. Mitchell) talks of possible job losses in Grimsby, I have to hope that some of those jobs might come to Aberdeen, but the playing field is not level.

Mr. Meale: I take that point, and I sympathise on the points made about the introduction of new charges. That is why I have offered to broker a deal.
Although the average bills of fish firms have been lower than average household bills, the firms produce much more effluent than households do. Consequently, their bills per cubic metre have been lower on average. According to Anglian Water, the previous charges to fish firms in the Grimsby area were about 25p per cubic metre. The increased charges work out at about 66p per cubic metre—just over half the volumetric price that domestic customers pay. Given the volume of fish firms' effluent, it is remarkable that previous trade effluent charges for some firms were as low as £112 when the average household sewerage bill in Anglian Water's area was £164 in 1998–99.
A few fish firms have claimed, as a reason for continuing to pay low charges, that they produce natural waste. However, fish processing includes processes such as battering and crumbing. It also produces discharges with a high content of putrescible solid waste. By its very nature, the industry is dirty, and effluent can contain blood, offal, oil, flour and other residues. The effluent is comparatively polluting and expensive to treat.
In England and Wales, since before privatisation, trade effluent charges have been calculated according to the Mogden formula, under which charges are set partly according to the nature of the effluent and partly according to the level of treatment undertaken. That is in line with the polluter pays principle, which we fully endorse.
Fish firms are being asked to meet the higher costs of treating their effluent to at least secondary standards, as is required by the urban waste water treatment directive. We support the directive's main aims, and I shall outline some of the main improvements that it requires. There should at least be minimum requirements for the treatment of all significant discharges of urban waste water from the sewerage network to fresh waters, coastal waters and estuaries. Secondary treatment—that is, treatment by a biological process—is required as the norm for urban waste water discharges.
The directive requires that the most potentially polluting urban waste water discharges—in other words, those into sensitive areas—should have been treated by the end of 1998. Those serving communities of 15,000 people or more must be treated to secondary standard or higher by the end of 2000, but treatment of smaller discharges can be deferred until the end of 2005. We consider that all of that is right, and we want improvements to be introduced as quickly as possible—

Mr. Deputy Speaker: Order. We must now begin the next debate.

Plymouth and Torbay (Objective 2 Bid)

1 pm

Mr. Adrian Sanders: I am tempted to move to the Dispatch Box, given the absence of Conservative Members, but—

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. This is the second time I have had to intervene. These half-hour Adjournment debates are the personal property of the hon. Member introducing them. The relevance of any other hon. Member attending them is not at issue; they are a matter only for the hon. Member introducing the debate and the Minister replying.

Mr. Sanders: The south-west region suffers from an outdated conception of its prosperity that is based either on an old-fashioned view of current conditions—often resulting from people's childhood experience of pleasant summer holidays—or a view that the east of the region, which is prosperous, is somehow typical of the entire region. In a sense, we are the victims of our own marketing strategy. We spend thousands of pounds marketing the area to the rest of the nation and overseas as a place that is good to visit, with a high-quality environment, good standards of accommodation and plenty of attractions. That tends to hide some of the social problems that lie behind the facade of the marketing strategy.
Cornwall's designation as an objective 1 region demonstrates that there are substantial problems in the west of the region, but those problems do not end at the Tamar bridge. My Cornish colleagues may even agree with me when I say as a Devonian that parts of my county are indistinguishable from the county of Cornwall: the tin mine ruins of west Devon, the chapels of north Devon, the fishing port of Brixham and, linking both counties as a main centre of education and employment, the city of Plymouth, which provides thousands of jobs, as well as education and health services, for people who live in Cornwall.
The Plymouth-Torbay-Devon arc essentially represents a dividing line between the prosperity of the main south-west region and the Cornwall-Devon periphery, where unemployment is significantly higher and GDP per capita considerably lower than the national, regional or European averages. Indeed, 56.5 per cent. of people in the arc area are economically active compared with 62.6 per cent. of people in the south-west generally, and 16 per cent. are recipients of income support, compared with just 12 per cent. in the rest of the region. Average earnings are 84 per cent. of the UK figure and our GDP per capita figure is 82 per cent. of the European average. The figure for my constituency of Torbay is equivalent to that for Cornwall, at 71 per cent.
The area's historic economic rationale and its recent problems derive from its natural environment. Inland, the importance of agriculture and the natural environment dominates, while, on the coast, the traditional industries of tourism, fishing, defence and support services have been in decline for some time.
The decline of dominant sectors has affected every part of the north, west and south of the county, and includes a substantial decline in industrial employment in Plymouth, the slow and inexorable decline in agriculture-related

employment throughout the rural part of the area, a continuing decline in the service sector, particularly resort tourism employment in Torbay and other coastal locations, and a decline in fishing and related industries.

Mr. John Burnett: I am grateful to my hon. Friend, who is making a powerful case. We in Devon are delighted that Cornwall has received objective 1 status. Does my hon. Friend agree, however, that if the Devon arc does not achieve objective 2 status, investment and jobs will go to Cornwall or remain in the prosperous areas to the east of the Devon arc, leaving us with a corridor of neglect?

Mr. Sanders: My hon. Friend makes an important point. There is already evidence of that. A prospective call centre that wished to locate in my constituency is now looking at Cornwall rather than Devon because it has objective 1 status. There could be more such cases in future if our bid is not successful. One of the criteria laid down by the European Commission—which is also part of the Government's remit—is to assist areas adjacent to those that receive the maximum objective 1 support.

Ms Candy Atherton: I am grateful to the hon. Gentleman for giving way. He will know that we in Cornwall were very grateful for the support of colleagues from Devon for our bid for objective 1 status. Is he aware of how much we recognise the importance of Devon's objective 2 bid? It is important to acknowledge that we are not in competition here. One reason for Cornwall's success was the unanimity across the wider south-west that we needed objective 1 status. It is vital that the message gets through that Cornwall is also calling for objective 2 status for the hon. Gentleman's constituency, just as Devon called for objective 1 status for us.

Mr. Sanders: The hon. Lady is absolutely right. Other partnerships of support are emerging throughout the south-west. I was very pleased about the support from Somerset, Gloucester and Bristol and from right across the south-west, as well as from Cornwall.
Our economic problems did not occur overnight with the loss of a major employer or an industry such as steel or shipbuilding, but the social and economic effects are just as severe. The question that has to be answered is not whether the area should receive assistance but when.
The Plymouth-Torbay-Devon arc bid is not an immediate reaction to a new set of events, but a considered response to a long-term trend. Traditional employment opportunities have been in long-term decline, new sectors have failed to emerge and low-wage and often part-time employment dominates the labour market.
The trend towards low-wage and part-time employment has increased in recent years. The majority of jobs in sectors under threat, such as fishing and defence-related industries, have been full time and higher paid. As those jobs have declined, they have been replaced by predominantly part-time and lower-paid service sector jobs. Even in lower-paid industries, such as agriculture and tourism, there has been a move away from year-round, full-time jobs to more seasonal part-time jobs.
Even though there is a strong and vibrant hotel and catering industry in the region, and especially in my own constituency, it supports far fewer people in the area than it


did in the past. Gone are the days when a small guesthouse could generate enough to provide a sole income for the owners. Gone are the summer months when family-owned local shops would get a boost in trade that stopped the business from going under in the winter months. Gone are the week-long, bucket-and-spade holidaymakers in their thousands, whose holiday pay circulated in the local economy for months after their visit.
Today's visitor will spend more, but less of that money will stay in the local economy. It will be spent in national accommodation chains, nationally owned petrol stations and superstores, nationally run entertainment centres and tourist attractions and nationally franchised fast food outlets. Nationalisation in the literal sense has seen to that. Globalisation has had similar effects in fisheries, agriculture and defence—the other main south-west industries.
One of the main consequences of those changes is that well-educated, trained and skilled labour is fast becoming our main export to the rest of the United Kingdom.
Our problems were recognised under the far south-west objective 5b programme, the Plymouth objective 2 programme, through funding drawn down under European social fund objective 3 and Community initiatives such as PESCA, LEADER and KONVER.
The far south-west has an established track record of successfully implementing a number of European programmes, but the nature, mechanics and scale of previous programmes have only slowed the economic decline of the region. The 1994–99 programmes can be regarded as the start of the process of reversing decline, but it is far from complete.
The intention behind the new objective 2 bid is to build on past programmes. Already, a comprehensive partnership of local councils, businesses, community groups and voluntary organisations have come together and identified the main drivers for change. They include competitive small and medium enterprises. The long-term prosperity of the region is dependent on a strong, outward-looking and competitive business sector.
Technology and knowledge-based industries are also important. The growth of industries in which physical location and accessibility are less important presents opportunities for the far south-west. For example, 70 per cent. of all internet traffic in north America is transported on equipment made in south Devon. With our skilled work force, clean environment and strong university bases in Plymouth and Exeter, the area is very well placed.
We need to support sectors in transition. Adjustments in the agriculture, fisheries, defence and tourism sectors have hurt the local economy. With support from all four of the strands in the objective 2 programme, we can help those industries to create new opportunities and improve their competitiveness.

Mr. Anthony Steen: The hon. Gentleman is wise to have given way to me, because I intend to support him on this occasion and say what an excellent initiative he has taken in securing this debate. My hon. Friend the Member for Teignbridge (Mr. Nicholls) and I share his sentiments and support his case, and we hope that the Minister will be able to give us some good news.
Does the hon. Gentleman agree that one of the major factors in getting new money into Devon is that we should have a good transport network? Does he share our concern about the lack of railway development and agree that, without good air and rail transport, new industries will not want to locate in our area?

Mr. Sanders: I thank the hon. Gentleman for his support and agree that transport links are crucial. We may be able to tackle some of the transport problems through objective 2 funding, so it is doubly crucial that we secure it.
Community regeneration is another important economic driver. The major task will be to tackle the severe deprivation in the region's major urban centres as well as in some of the smaller towns. The failure of trickle-down approaches to the regeneration of deprived communities is now widely accepted. The region has a strong track record in community-led and co-operatively structured initiatives, with wealth and job creation centred on local needs, local labour markets and local solutions.
I think that the case has been made. It is one with which the Minister is familiar, as he has taken the trouble to visit the region and sample the reality of our economic circumstances. For that, we are grateful, and we assure him that a warm west country welcome awaits him should he want to make a return visit.
We await with confidence the Government's decision on which areas will qualify for the new objective 2 programme. There is all-party support for our case, and a wide partnership of councils, businesses and voluntary organisations is working together and hoping for the best. We know that we meet the criteria and we can demonstrate that we have the networks and partnerships to maximise the opportunities that objective 2 designation will bring.
We would like a hint that we are moving in the right direction, that the Government recognise that there are structural problems behind the marketing image that we create to attract visitors to our area, and that assistance is at long last on the way.

The Minister for the Regions, Regeneration and Planning (Mr. Richard Caborn): I thank the hon. Member for Torbay (Mr. Sanders) for securing this debate. We are trying to bring more sense to the way in which we spend public funds in the English regions and to consider more strategically all the elements that need to be put together to tackle the problems in areas such as his, which, as he says, I visited a few months ago. The regional development agencies have a role to play in advising Government on the disbursement of the single regeneration budget, on the development of our assisted areas map and regional selective assistance, and on the structural funds.
We are genuinely trying not only to formulate joined-up policies for the regions but to get joined-up money to implement them. The representations of the RDAs have made this an interesting period.

Mrs. Linda Gilroy: I congratulate the hon. Member for Torbay (Mr. Sanders). This debate is as important to my constituents as it is to his.
The difficulties of the economy in Plymouth are deep-seated. Is my right hon. Friend saying that we will be able to tackle the disparities through that joined-up thinking? The Treasury's public expenditure statistical analysis shows that the south-west is among the three regions receiving the least identified general Government expenditure. As he probably knows, in 1996–97 Scotland got £4,756 per head; Wales £4,553; the north-east £4,235; and London £4,601. By contrast, the south-west got only £3,651, or a whole £1,000 per resident less than Scotland. I hope that we will be able to begin to redress that, and the importance of objective 2 in that respect cannot be overstated.

Mr. Caborn: I cannot answer directly, because I do not know the composition of all the figures, but my hon. Friend makes a telling point.
We must take a strategic approach, and land use and transport planning are major parts of that. I hope that when the examination in public for the regional planning guidance for the area takes place we will be able to factor in some of the problems. One of the RDA's first actions was to underline its support for the extension of the runway at Plymouth airport: a decision clearly taken with an economic as well as an integrated transport perspective.
The hon. Member for Torbay eloquently put the case for his area and for Plymouth. As the Minister with responsibility for the English regions, I welcome the opportunity to reply to the points that have been made.
At the Berlin summit in March, my right hon. Friend the Prime Minister secured a very good deal on European funding for the regions in Britain, and many areas of the United Kingdom will benefit from funding for economic development and regeneration over the next seven years. We have always accepted the need for member states to take cuts in the size of their population covered by the funds to make enlargement affordable—that has been generally agreed in the House—but the cuts have to be fair. We are pleased to say that we have negotiated an outcome that we believe to be fair and affordable for all future and existing member states, including the United Kingdom.
Figures released by the Commission on 1 July confirm that the UK got a good deal at Berlin. UK regions will get funding of more than £10 billion for 2000-06 for economic development and regeneration. That funding will be good for jobs and investment in the regions. Money will be spent on projects involving business support, education, transport and the environment. We aim to target the support directly to the UK's neediest areas.
That deal shows the Government's commitment to maximising the benefits of European Union membership for the people of Britain.

Mr. Steen: As the Minister probably knows, a third of Torbay is in my constituency.

Mr. Sanders: A quarter.

Mr. Steen: A quarter, is it? I thought a third.
The Minister mentioned the most needy areas. Does he accept that the area under discussion is a needy area?

Mr. Caborn: I shall come to that in a minute.
A unique package of support for Northern Ireland was secured at Berlin, as well as a special deal for the highlands and islands; both areas will continue to receive generous support of about £1 billion in total. Cornwall, West Wales and the Valleys, and South Yorkshire—my area—will receive objective 1 funding for the first time, and Merseyside will continue to be eligible.
It is not a great accolade to get objective 1. I think that I said that when I was in Cornwall. We do not aim for objective 1 or 2. We want to be at the top of the wealth creation league in Europe. That is what we have to strive for. I hope that, if I still have this job in seven years' time, I will not have to read out a catalogue of areas that have got objective 1 or 2 funding.

Mr. Burnett: The Minister is making a powerful point about market forces, but does he concede that, in our part of the world, there are, rightly, significant planning constraints, and that objective 2 would help us to get the seed corn investment in jobs that we so urgently require?

Mr. Caborn: I take that point, and it is why we are in the process of modernising the planning system. I have explained our new planning guidance on housing to the House several times, and have just done so to the Select Committee on the Environment, Transport and Regional Affairs. When I was in the Torbay area a few months ago, 350 workers had just been made redundant at Nortel. However, I spoke to the firm yesterday and was told that 500 people have been taken on to work in a new development. The Government want to assist wealth creation by business, through transport, land-use planning, and the economic benefits stemming from the regional development agencies.
Perhaps the most notable success in the Berlin summit discussions on the structural funds was to secure the two thirds safety net for most UK regions. Given the cuts in funding coverage, the safety net will be of significant benefit to the UK, as it will maintain two thirds of the existing population coverage under objectives 2 and 5b, which have been amalgamated. The original plans were not fair, and we had to negotiate hard to secure the safety net, which means that about 13.8 million people—rather than the 6.5 million originally proposed—will be covered between 2000 to 2006 under objective 2. That shows the extent of the Prime Minister's success in the negotiations.
On 30 March, the Government issued a public consultation paper, announced to the House by my hon. Friend the Minister for Small Firms, Trade and Industry, to determine eligible areas for objective 2 funding. My hon. Friend invited interested parties to submit their views on possible eligible areas, as well as comments on preferred geographical areas—the NUTS areas to be covered—and outlines of the criteria that might be used to determine eligible areas.
That consultation ended on 25 May. More than 360 submissions were received from a wide range of individuals and organisations—indeed, 41 Members of Parliament wrote in support of their constituencies. I am very aware of the importance of the structural funds to the regions, as underlined by the response.
My hon. Friend and I have seen an enormous number of delegations over the past few months. As I said earlier, I have met the RDAs and representatives from each of the regional and local partnerships to discuss their objective 2


proposals. That has all contributed to the process of drawing together priorities for the proposed areas. The work of the RDAs has been a significant contribution to what has been a mature discussion in Whitehall about dispensing public funds, and I am grateful for it.
We also need to bear in mind the fact that this is just one of a range of instruments to address need at regional and local level. The Government are committed to providing a strategic and co-ordinated approach to tackling need, however it is manifested. That means matching the instrument appropriately to need.
During my meetings with regional delegations, I have emphasised the need to ensure that their objective 2 proposals are inclusive of other forms of funding, such as the single regeneration budget and the new deal for communities. The structural funds should be part of a funding package for the next seven years, led by the regional economic strategy. It is unfortunate that the RDAs will not produce their economic strategies until the end of the year, but they became operational only on 1 April. However, the RDAs' emerging economic strategies have contributed to their thinking, and they have been able to factor some of that thinking into their representations to Government about how the regeneration funds should be dispensed.
My Department, in consultation with the Department of Trade and Industry and other Departments, is now looking at the criteria and areas for funding based on local and regional representations, to help draw up the UK's list of areas eligible for objective 2 status, with a view to submission to the European Commission in the summer.
However, I stress that no decisions have been made yet. All areas will be considered equally for inclusion on the basis of need and against objective criteria, whether they are industrial, rural, urban or fisheries areas. The Commission's proposed breakdown of percentage covered by each strand—10 per cent. for industrial areas, 5 per cent. for rural areas, 2 per cent. for urban areas and 1 per cent. for fisheries areas—is indicative at EU level, not at member state level.
The Commission's definitive position is not yet known. It has released the amounts of money involved, but it has not yet clarified the criteria. We are waiting for that clarification, and we shall start work on the various maps as soon as we get it.

Mr. Sanders: Does the Commission have to make that decision before any announcement of which areas qualify can be made? Will the Minister say who will make the decision, and how? Will it be made known first to the House?

Mr. Caborn: I would hope that the announcement will be made to the House, but of course that cannot happen if the House has risen for the summer recess. As soon as we get the information from the Commission—and we hope that that will be sooner rather than later—we will make the announcement, but the timing is not altogether in our gift. I hope that the Commission can be hurried up a little, but we shall have to wait and see.
Discussions will take place with the Commission after we submit our proposed areas to it. We expect that

agreement will be forthcoming in the autumn. An announcement will be made of those areas that we propose to the Commission for eligibility under objective 2.
As I said, areas losing full objective 2 and 5b status will receive continued funding, at a reduced rate. They will have the flexibility to profile spending across the six years of transition that we have negotiated. The transition fund will be worth about £450 million, and will ensure continued funding for many areas that currently benefit from the structural funds.
I am sure that all hon. Members welcome objective 1 status for Cornwall. I hope that the county uses this unique opportunity effectively.

Ms Atherton: May I take this opportunity to thank my right hon. Friend, on behalf of the people of Cornwall? I know that they are universally grateful for the work that he has done to secure objective 1 status for the county.

Mr. Caborn: I thank my hon. Friend, and can tell her that I shall be going to Cornwall for my holidays this summer, as I have done for the past 15 years. When the beauties of Torquay and Torbay were described earlier, I was reminded of my honeymoon, which was spent in Torquay. I have fond memories of the area.
Cornwall will receive about £315 million over seven years from 2000, which will go towards the regeneration of its infrastructure and economy. That will be a much needed and welcome boost for the area.
I referred earlier to my meetings with delegations from the regions. During my meeting in May with the south-west delegation, led by Jill Barrow, chief executive of the RDA, we discussed, among other things, the case for Torbay and Plymouth's eligibility for objective 2 status. As I said, well before that meeting I had visited Torbay in October 1998, at the invitation of the hon. Member for Torbay. I was made very much aware then of the importance of gaining objective 2 status for the economic and social regeneration of the area.
I have taken note of what has been said in the debate, and of the powerful case that has been made for objective 2 status for the Plymouth and Torbay area. As I have said, the Government have not yet finalised their proposals for the new map.

Mr. Steen: Does the Minister accept that Torbay is a needy area and requires objective 2 status?

Mr. Caborn: The representations made on behalf of the area have placed it in its rightful position in terms of the needs of the south-west as a whole.

Mr. Steen: It is not what it was on the Minister's honeymoon.

Mr. Caborn: That is true, but we shall consider the whole picture. I therefore cannot predict the outcome of the consultation for any area, and it would be wrong to try. We have been objective and transparent in the way that we have considered the wider issues of regeneration, beyond the structural funds. However. I can assure the hon. Member for Torbay that the case for Plymouth and Torbay—as for all areas in the UK—is being carefully considered.

Gas Industry (Regulation)

Mr. Barry Gardiner: It is just over a year since I first had occasion to bring to the attention of the House the bullying and anti-competitive practices of Transco, a division of BG plc. I cannot decide whether my hon. Friend the Minister for Energy and Industry is more likely to begin his remarks by saying, "We must stop meeting like this," or with the somewhat less comradely, "Oh no, not you again." In the hope that it will be the former, let me start by bearing some good news.
Two weeks ago, I had the pleasure to stand with my constituent, Mr. Andrew Duffield, outside the High Court, where his solicitors had read a statement in open court announcing that BG plc had made an out-of-court settlement of £101,000 plus costs to Mr. Duffield and to his company, EGS—Exoteric Gas Solutions—in respect of the libel perpetrated against that company, which I had brought to the Minister's attention in last year's debate. That is indeed good news. I take the opportunity to thank him for his close and continuing interest in the case. But for his interest, BG plc might have taken even longer to capitulate. BG plc has deep pockets and it is hard for any impartial observer to do other than believe that it attempted to use its huge financial resources to bully a fledgling business into submission by forcing EGS to incur massive legal costs before settlement of the case.
If all I had to report were good news, however, I would not have presumed to detain the House this afternoon. In fact, I will expose lies and prevarication at the highest level in BG plc and Transco, and what must either be incompetence or a shameless lack of resolve on the part of the supposed regulator in the industry, the Office of Gas Supply.
Beneath all that, I will show that Transco's illegal and anti-competitive practices continue unabated, despite an enforcement order that was issued by Ofgas. Most disturbing of all, I will provide evidence that public safety has been jeopardised by Transco's change in response-time targets and in procedures for handling uncontrolled gas escapes.
I must provide the House with some background. The Gas Act 1986, which was amended in 1995, introduced competition to the business of connecting premises to the mains gas network. Previously, the market had been a monopoly controlled by British Gas-Transco.
In January 1997, Mr. Duffield, who had been a senior manager at Transco, left to set up a specialist gas connection company, EGS, to compete against Transco. Under the Gas Act, Transco is charged with custodianship of the gas mains network and all competitors such as EGS must apply to it for a quotation for the final-stage connection of any new development.
Without that information, EGS cannot provide an accurate quotation to the end customer for the cost of the scheme. For that reason, Transco has a statutory obligation not to abuse its position by delaying a quotation to its competitor to advantage its connections team, which is competing for the direct business. Nor may it over-quote for the final connection to EGS in order to raise the price quoted by EGS to the end customer, thereby making its bid uncompetitive.
It was those statutory obligations that I accused BG plc of ignoring in the debate of 9 June last year. I have a copy of a letter from Mr. Richard Giordano, chairman of BG plc, to Mr. Duffield dated 24 June 1998. It says:
I am fully aware of the statements made by Mr. Gardiner M.P. at the Adjournment debate in the House of Commons having received a full transcript from Hansard of the debate including the Minister's reply. BG plc is furnishing the Minister with a statement on the main issues that were raised, a copy of which will be passed to you.
That was a lie. Despite three reminder letters, no such statement was ever passed to Mr. Duffield.
I have a copy of an affidavit sworn by Mr. Christopher Lefevre, a director of Transco, in which he deals with the circumstances surrounding the production of the libellous e-mail, the same e-mail in respect of which BG plc has had to pay £101,000 plus costs. That e-mail was headed:
BG plc Transco Memorandum from the Area Directors to all Managers of District Operations.
In the affidavit, Mr. Lefevre recalls that
Phil Nolan, who was then Area Director for East Area, assumed the role of acting Area Director for South Area.
Thus, Mr. Nolan, in two capacities, can be said to have sent the e-mail that was from all the area directors.
More than that, in the affidavit, Mr. Lefevre recalls that
Phil Nolan asked me to deal with a letter sent by OFGAS".
He continues:
I had a general discussion about the issue with David Ashbourne, the Manager of Legal Services and decided to issue the e-mail of 27 March 1997 instructing staff not to deal with the Plaintiffs"—
that is, EGS.
On 1 September 1997, the same Phil Nolan wrote to Mr. Duffield specifically to confirm:
I have issued no such instruction and there are no such instructions to that effect in place.
That, too, is a lie. Phil Nolan has since been promoted to become managing director of Transco. Like the chairman of BG plc, Mr. Giordano, he remains in post.
The Minister is aware that, in February, Ofgas finally issued a decision document relating to its investigation of Transco. The document concluded that
there have been unacceptable delays in Transco's quotations for connections, that there has been overcharging and that Transco's behaviour is anti-competitive".
It goes on to say:
There is a likelihood of continuing breaches, if action is not taken",
and states unequivocally that
information provided by Transco in the course of the investigation has proved to be untrue".
At last we have some tough talk from the regulator. It is two years too late perhaps, but, despite the fact that Ofgas stubbornly refuses to interpret the Gas Act as allowing it to punish past action, at least it insists on compliance with statute and the introduction of a system of compensation for any future breaches. The order states:
The scheme shall provide as a minimum for payments to be made in such amounts in such circumstances and on such terms as are provided in Attachment 2 to this order.


Let us examine attachment 2, which deals with claims for compensation. Paragraph 7, subsection (ii) provides that:
If, before the expiry of five working days from the submission of the claim the quotation is adjusted by Transco so that the reason why it was thought to be excessive has been addressed to the reasonable satisfaction of the person who submitted the claim no compensation shall be payable by Transco".
That may not pass the crystal clear standard of plain English, but the effect is devastating. It means that Transco has every incentive to continue overcharging in the certain knowledge that, even if it is caught out, all it will need to do is agree to reduce the charge to the proper level within five working days. It will then not have to pay any compensation at all—not even the client's costs of showing that it has overcharged. That is not regulation, but a fraudster's charter.
The case of Mrs. Moyies provides an example of Transco's racketeering and of Ofgas's total ineffectiveness as a regulator. She lived in an area of Cumbernauld that was not supplied from the gas mains. She obtained a quote from Transco to have her home connected at a cost of £2,730.17, an exorbitant sum, but she calculated that, within three years, the savings on her Calor gas bills would have recouped that enormous investment. She borrowed the money and got connected by Transco.
Over the next few weeks, Mrs. Moyies's supply was cut off by Transco as it connected neighbouring properties. Those were connected for £146 per house. When she complained, her Member of Parliament, my hon. Friend the Member for Cumbernauld and Kilsyth (Mrs. McKenna), who is my good friend, took up her case and brought it to the attention of Ofgas and the Gas Consumers Council. Transco insisted that the charge was correct. Mrs. Moyies had to pay for the extension of the mains and it was then permissible for Transco to spur off that extension to neighbouring properties. Neither Ofgas nor the Gas Consumers Council had the expertise to show that Transco had overcharged.
Fortunately for Mrs. Moyies, Mr. Duffield heard of the case on Radio 4's "You and Yours" programme. He was able to demonstrate that Transco had overcharged by 120 per cent. Mrs. Moyies's bill was reduced from £2,730.17 to £1,231.14. Transco had overcharged in accordance with its own statement of charges, which it published and which were provided to the Director General of Ofgas herself.
In a letter of 5 May 1999, some six months after the original complaint to Ofgas, Mr. Graham Boorer, gas distribution engineer of Ofgas, wrote:
Transco accepts that the charge was not in accordance with its Condition 5 charging methodology and that it overcharged for the connection.
What did Ofgas do? It looked carefully at condition 5 paragraph (7) of the Department of Trade and Industry's standard conditions of public gas transporters' licences, which states:
Where a statement in respect of the determination of such charges as are mentioned in paragraph (3) has been furnished to the Director under paragraph (3) or (4) then unless and until it has been superseded by a subsequent statement under paragraph (4), the licensee shall not make such a charge or agree or offer to make

such a charge as is so mentioned other than the one determined in accordance with the methods and principles shown therein, unless the Director otherwise consents.
Transco made a charge other than the one determined in accordance with the methods and principles shown therein. This was Transco's own statement of charges as mentioned in paragraph (3), which provides:
The licensee shall comply with any directions given by the Director to furnish him with a statement showing the methods by which, and the principles on which
such charges are to be made.
Ofgas argued that although the statement had been sent by Transco to the Director General of Ofgas, although Transco had published and accepted it as its basis of charging and although it accepted that it had contravened that statement and overcharged Mrs. Moyies, Ofgas could do nothing because the director general had never asked for the statement as per paragraph (3). Of course she had not done so. One does not ask for something that one already has. Ofgas is supposed to be the rottweiler regulating the industry. In fact, it is the industry's lap dog, or more accurately, it is Transco's.
The Ofgas connections steering group has collected statistics from Transco itself, which show that out of 77 responses to inquiries during September and October last year only 57 per cent. were within Transco's own standards. That record is appalling enough, but the strange thing is that it improves so dramatically—to 86 per cent. within standard—if one excludes responses to Mr. Duffield's company EGS.
Only 21 per cent., or one in five, of Transco's responses to EGS were within standard. An objective observer might regard that as clear evidence of blatant discrimination against EGS. Ofgas continues to regard those responses as a series of isolated and unconnected mistakes on the part of Transco.
In a letter dated 25 February 1999, Mr. William Sprigge, Ofgas's legal counsel agrees that:
BG has on occasions treated EGS differently to other businesses requesting quotations.
However, he is quick to add:
Whether this has been deliberate is uncertain. We therefore cannot say that BG has not deliberately treated EGS differently to other businesses requesting quotations; nor can we say that it has.
For such a shameless display of fence-sitting, I simply express the wish that all Mr. Sprigge's fences be henceforth topped with razor wire.
Finally, I must make good my claim that there is evidence that Transco has prejudiced public safety by its changes to the procedures for handling gas escapes and the reduction in response time targets for such incidents. Prior to the establishment of Transco in 1994, BG responded to more than 99.99 per cent. of uncontrolled gas escapes within one hour. Since Transco took over, its performance has fluctuated between 97 per cent. and 92 per cent. Given that there are more than 1 million calls a year, that means there are tens of thousands of occasions on which the public has been exposed to a significant danger for longer than would have been the case under the old British Gas company.
In May 1997, Mr. David Varney, BG plc's chief executive, wrote following a challenge at the company's annual general meeting that:
concerning the figure of 96 per cent. performance against the applicable regulatory standard of attending uncontrolled gas escapes within one hour, the information, as best we know it, is accurate…


In terms of your query as to the former standard of 99 per cent. within one hour, I confirm that we are working to improve performance in this area. However, we are not in a position to disclose information relating to the 1997 target at this time.
Changes in response times are not the only adverse changes in safety standards that Transco has introduced. New working practices mean that teams attending uncontrolled gas escapes are often unsupervised. In some cases, the line manager is 100 miles away and yet different workers at the site believe that other members of their team have a supervisory role, which they do not.
I ask the Minister to raise those matters with the Health and Safety Executive and to establish what percentage of responses Transco currently meets within one hour, its current target response figure and the steps that it has taken to ensure proper supervision at the site of uncontrolled escapes and clarity and responsibility among the teams attending.
I said what steps Transco "has taken" because the safety issue is not new to Transco. Indeed, a report was prepared for the area directors of Transco in December 1996 by a senior manager who had particular expertise in the investigation of incidents and the formulation of policies and procedures to minimise the risk of further escapes. That investigation revealed that safety standards had fallen substantially from those inherited in 1994. In particular, the investigation revealed that procedures developed in response to previous incidents had lapsed into disuse. A serious question was raised about whether a single one of Transco's directors possessed the necessary skills and operational experience to carry out the proper review of incident trends.
The original draft of that report caused such a stir that its commissioner, Mr. Lefevre, phoned its author, who was buying a sandwich in his lunch hour. On answering his mobile phone in the supermarket, the author was curtly asked to destroy the report. He refused to do so, but eventually agreed to modify some of the language contained in it. The author of that report, which caused such embarrassment and disquiet to Transco, was of course Mr. Andrew Duffield who had been assigned that as a final project before his departure to set up EGS.
Some people might venture that the extraordinarily poor service that EGS has received from Transco in the past two years—the constant delays in quotation, habitual overcharging, and the refusal to pay the prescribed penalties for statutory breach even where it is admitted that they are due—has been in no small way related to the embarrassment that Transco felt at Mr. Duffield's report on its company safety.
Be that as it may, the fact that Ofgas has either not possessed, or failed to apply, powers to protect Mr. Duffield is just as serious. It must be the concern of all hon. Members that assurances are sought and received from Transco about public safety, that anti-competitive behaviour in the industry is eradicated and that Ofgas begins to take seriously its role in regulating that industry and protecting consumers such as Mrs. Moyies and companies such as EGS.

The Minister for Energy and Industry (Mr. John Battle): I thank my hon. Friend the Member for Brent, North (Mr. Gardiner) for raising this matter again and for securing this debate. I welcome the debate; he should not

apologise for returning to the matter. It is the role of us all as Members of Parliament to persist in drawing attention to injustices and flaws in the structure of our laws and budgets. He has done so assiduously. He has raised serious matters on behalf of his constituent.
Although the Government do not run energy industries—all the companies operate privately in the marketplace—the gas and electricity industries are subject to competition regulation, to tackle both abusive market power and anti-competitive market practices. The independent regulator—there is now one regulator for the gas and electricity industries—operates within the relevant Acts of Parliament.
When we came into office in 1997, we inherited the Gas Act 1995 and the Electricity Act 1989, which set out the parameters for activities. We decided that, although they were okay as far as they went, they were flawed. We are updating them, and, when we have an opportunity, we shall change them through primary legislation. Indeed, we have already acted to change the terms of operation under the licence conditions.
My hon. Friend asked some detailed questions about the interpretation of conditions of standard. If I cannot reply now to all his points, I shall ensure that he receives a detailed response in a follow-up letter.
The gas and electricity industries occupy a crucial position in the United Kingdom economy, accounting for 2 per cent. of the gross domestic product. They provide essential services to millions of people. Our intention is to ensure that consumers come first and that the regulatory regime reflects that. We accept that the system is far from perfect and have already implemented a better and fairer one, which re-emphasises the consumer.
We issued a Green Paper on the regulation of utilities last spring, which laid the foundations for a better and more efficient regulatory system. We proposed to improve and align gas and electricity regulation under a single energy regulator, to separate electricity distribution and supply, and to provide a new basis for delivering policies to encourage energy efficiency and generation from renewable sources.
In response to our consultation in July 1998, we announced the intention to merge the Office of Electricity Regulation and the Office of Gas Supply. They now fall under a single energy regulator in one body. We also announced that the new regulator should organise the appropriate structure in which all energy industries are regulated. We have made a fresh start, with the appointment of one person to the posts of Director General of Gas Supply and Director General of Electricity Regulation—not least because electricity companies are now selling gas, and gas companies are now selling electricity.
Such a structure needs to be reinforced by law, and, when parliamentary time allows, we shall align the regimes of electricity and gas regulation, which were out of sync under the legislation that we inherited.
We have also taken action to change the rules when they do not work immediately in favour of the customer. As a result of complaints that I as a Minister and many other hon. Members have received about door-step selling, we inserted a marketing clause into the gas suppliers' licence to challenge bad practices and improve them. We intend to use the proposed utilities Bill to sort out regulation at the earliest opportunity.
My hon. Friend has pursued the case of Exoteric Gas Solutions with me and my Department. We have had many meetings and much correspondence on the issue, which was raised in the House in June last year. Following his constituent's complaint, the Office of Gas and Electricity Markets—Ofgem—carried out a thorough investigation into Transco's connections business, and found Transco to be in breach of standard condition 11(1) of its licence and section 9(2) of the Gas Act.
Ofgem consequently made an enforcement order against Transco, requiring it to introduce systems for handling quotations for connections to its pipeline system and to achieve the International Standard Organisation 9001 standard for the systems. Transco also had to introduce a liability scheme for failures to meet standards of service. Ofgas, as it was then, imposed the enforcement order on Transco on—I think—19 February, so things have moved on significantly since last June.
To be in breach of an enforcement order is a serious matter. It is the first time that such an order has been made against Transco. It takes the form of a public notice and the company must take responsibility for it. I know that Transco is taking it very seriously.
I thank my hon. Friend for drawing my attention to the particular case of Mrs. Moyies's connection. I cannot answer it in detail in the House, but I will ask for a thorough investigation of the practice in order to draw out implications for the structure of the entire connections industry.
My hon. Friend mentioned that legislation allows the Director General of Gas Supply to make provision in a final enforcement order for a monetary penalty. In addition, if an enforcement order is made and not complied with, the legislation confers the right of action on persons who suffer loss or damage as a result of that non-compliance, subject to certain defences.
That describes the situation under the regulatory regime that we inherited from the previous Administration. We are considering those arrangements very carefully to see whether improvements can be made for future cases of alleged breach of licence conditions. It may be possible to give the regulator powers to impose monetary penalties that are proportionate to the circumstances for past as well as continuing breaches of licence conditions. I know that that is what my hon. Friend has consistently and persistently campaigned for, and I hope that we can give him some solace in the not too distant future.

Mrs. Linda Gilroy: I congratulate my hon. Friend the Member for Brent, North (Mr. Gardiner) on bringing this important matter before the House and particularly on highlighting the lack of

expertise available to assist consumers in pursuing such issues. In the forthcoming utilities Bill, for which we hope, and the follow-up to the review, will my hon. Friend the Minister ensure that the Gas Consumers Council or its successor body has the resources to make such expertise available?

Mr. Battle: My hon. Friend makes an excellent point. She has championed energy consumer councils in her time in the House. In the revised regulation that we hope to introduce under the utilities Bill in the not too distant future, we hope to give consumers a much strengthened voice through the consumer councils. As she said, that means that they ought to have the resources to enable them to do the job well and properly.
I should mention the important question of safety, which is paramount. Under the licence condition, which is tighter than the general condition, a response must be made within one or two hours. I should emphasise that the National Audit Office, a body entirely independent of the Government, published a report on competition in the domestic market on 12 May, and some of its headline points were encouraging.
As we know, prices are down; all suppliers are offering lower tariffs. Customers have a choice; 26 companies are active in the domestic market. Crucially, safety has been maintained and the quality of service to customers has on the whole improved. I shall keep a close eye on safety, although the NAO's report was encouraging and I was heartened by the fact that it was, in the main, so positive.
On the downside, the report pointed out that many customers do not have sufficient knowledge of changing structures. There has been a maelstrom of change since the days of one nationalised gas company. Companies have proliferated, with new entrants to the marketplace as well as the separation of former nationalised industries. People do not know how much the market has changed or know what to expect. It is all right saying that they all have choice, but if they do not know of what, life is made incredibly difficult. There have been complaints of poor selling techniques and lack of information on what to expect. That in turn can drag down quality and performance. I am determined that that shall not happen, and I am sure that the regulator cannot tolerate it either.
I shall look in detail at all the points that my hon. Friend the Member for Brent, North has made. We must consider how we shape the market's regulatory structure for the future. That is precisely the point of our White Paper—

Mr. Deputy Speaker (Sir Alan Haselhurst): Order.

It being Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Sitting suspended, pursuant to Standing Order No. 10 (Wednesday sittings), till half-past Two o'clock.

Oral Answers to Questions — WALES

The Secretary of State was asked—

Tourism

Mr. Michael Fabricant: If he will make a statement on the state of tourism in Wales, with particular reference to raising standards of bed-and-breakfast accommodation. [88521]

The Parliamentary Under-Secretary of State for Wales (Mr. Peter Hain): I had responsibility for this matter until 1 July. In difficult circumstances, the industry in Wales has performed well. We have allocated an additional £1 million to the Wales tourist board. Quality standards in the bed-and-breakfast sector—

Madam Speaker: Order. The Minister said that he had responsibility until 1 July. It is 7 July. Is it not a devolved matter?

Mr. Hain: I understand that, Madam Speaker. I was just explaining that it is a devolved matter, but I was talking about what had gone on until 1 July.

Madam Speaker: Yes, but if it is a devolved matter, we must pass on.

Mr. Hain: It is indeed, from 1 July.

Madam Speaker: Thank you.

Welsh Legislation

Mr. Dafydd Wigley: What plans he has to introduce amendments to legislation dealing specifically with the needs of Wales with regard to (a) the Government of Wales Act 1998, (b) the Local Government (Wales) Act 1994, and (c) the Welsh Language Act 1993; and if he will make a statement. [88522]

The Secretary of State for Wales (Mr. Alun Michael): None.

Mr. Wigley: I believe that this is not a devolved matter. I thank the Secretary of State, who also doubles up as First Secretary, for that comprehensive answer. Does he agree that there will be times when legislation to deal with Wales alone, such as the three Acts referred to in the question, will need amendment—perhaps relatively minor amendment—to enable the Assembly to undertake its work and to allow other activities in Wales to go forward? Does he agree that it would be helpful to have a fast-track procedure to deal with such legislation? Is he involved in discussions about the possibility of the Welsh Grand Committee being reinvented to enable such relatively small changes to go forward?

Mr. Michael: The Assembly is free to ask the UK Government to amend primary legislation. In another

place, the right hon. Gentleman and I might well discuss where it was appropriate for those requests to be made. If the Government agreed, the Secretary of State for Wales would steer the amendments through Parliament. It is for this House to decide how it would deal with such matters. I am sure that the appropriate authorities understand the right hon. Gentleman's point and will consider it.

Mr. Llew Smith: My right hon. Friend's predecessor as Secretary of State for Wales said that we needed a Welsh Assembly because Wales was increasingly run by quangos. I was not a great supporter of the Welsh Assembly, but I am certainly opposed to quangos. The previous Secretary of State also gave a commitment to end the quango state in Wales and make a bonfire of the quangos. Will the present Secretary of State give us a date when the commitment will be met and the bonfire will happen so that we can all attend?

Mr. Michael: My hon. Friend should attend regularly as we remove quangos. The Cardiff Bay development corporation will wind up its affairs by the end of March next year. A number of organisations, have already been folded. It is important that the Assembly is taking on its responsibilities. During the Assembly's short time in being, a lot of which has been devoted to preparing the ground for future action, Members of the Assembly and the Assembly Cabinet have been engaging with the policies and activities that have previously been the responsibility of quangos. The underlying trend of my hon. Friend's question is being pursued.

Mr. Nigel Evans: As the Secretary of State has said, the National Assembly for Wales has been running effectively for only a week. It is no surprise that the nationalists are looking, under the Government of Wales Act 1998, for further transfers of power. Will the Secretary of State give a commitment to the House of Commons and to the people of Wales that there will be no more transfers of powers from Westminster to Wales, particularly tax-raising powers, until the people of Wales have been given their say in a referendum?

Mr. Michael: The hon. Gentleman raises an interesting point. He attacked the nationalists for wanting to go further, but his party did not want to go anywhere and has made a sad lack of contribution to date. The job of the National Assembly is to make the current devolution settlement work. It is good settlement, which provides an opportunity for those who have been elected to the Assembly by the people of Wales to bring accountability and creativity to bear on policies directly affecting Wales. That is what is happening in Cardiff bay now.

Beef Industry

Ms Jackie Lawrence: When he next intends to meet the Assembly Secretary responsible for agricultural issues to discuss problems in the beef industry. [88524]

The Secretary of State for Wales (Mr. Alun Michael): This is a matter for the National Assembly for Wales, but I am delighted to see that Christine Gwyther,


as the Assembly Secretary with responsibility for agriculture and the rural economy, has taken up her duties with such strength, integrity and determination.

Madam Speaker: Order. If the Minister announces that it is a matter for the National Assembly for Wales, I cannot allow the House to trespass on those responsibilities. [Interruption.] If the Minister tells me that it is a matter for the Assembly, it cannot be a matter for the House, correct?

Mr. Michael: Correct.

Abattoirs

Mr. Desmond Swayne: What representations he has received regarding the number of European Union export approved abattoirs in Wales. [88525]

The Parliamentary Under-Secretary of State for Wales (Mr. Jon Owen Jones): None.

Mr. Swayne: Will the Minister undertake to launch an investigation into the administrative and regulatory burdens that are faced by abattoirs in Wales as compared with the rest of the European Union? Will he undertake to publish the findings of those studies? Can he assure the House that the studies will be carried out by impartial and proper sources, not vegetarians?

Mr. Jones: This is a matter for my right hon. Friend the Minister of Agriculture, Fisheries and Food, or, in Wales, for the National Assembly.

Madam Speaker: Order. In that case, it is a matter for the Welsh Assembly. It cannot be the responsibility of both this House and the Assembly.

Mr. Ted Rowlands: On a point of order, Madam Speaker.

Madam Speaker: I cannot take points of order in the middle of Question Time. Once we break our rules, there will be no end to it.

NHS Funding

Miss Julie Kirkbride: When he last met the Assembly Secretary with responsibility for health to discuss the funding of the NHS in Wales. [88526]

The Secretary of State for Wales (Mr. Alun Michael): I am delighted to see that devolution is working through in the way that Jane Hutt has taken up her role as Health Secretary in the Assembly. She is one of four women appointed to the Assembly Cabinet. This is already making a significant impact on the serious problems of the NHS in Wales, which is in a parlous state owing to the incompetence of the last Government. The Assembly will make a significant impact towards improving that situation.

Miss Kirkbride: I am delighted to see that, after the farce we have just experienced, the national health service

is still a matter for this House. According to the Secretary of State's answer, the Government still have responsibility and they have a great deal to answer for when it comes to the NHS in Wales. The Secretary of State will be aware that, on 31 March 1997, the waiting list for the waiting list—people diagnosed by their general practitioner as needing treatment and waiting to see a consultant to be put on an official waiting list—was 5,956 in the Principality. By 31 May 1999, 26,094 people were waiting for their initial hospital appointment. That is an increase of 400 per cent. as a result of the Government's policies for the health of the people in Wales. Is it not time that the Government admitted that, under Labour, the health service is getting worse?

Mr. Michael: The hon. Lady clearly does not understand the damage done by the previous Conservative Government, for which she and her hon. Friends should apologise. The hon. Lady also does not understand that these matters are now the responsibility of the National Assembly, which is seeking to tackle them.

Mr. Win Griffiths: Will my right hon. Friend remind me whether the amount of money spent on the health service has increased substantially ahead of inflation? Is anything being done about the burden of debt that faced the health service before 1997 and which it is taking so much time to get grips with?

Mr. Michael: My hon. Friend is absolutely right. In the period up to 1 July, strenuous efforts were made to prepare the ground for the Assembly's taking over the NHS in Wales and to enable it to tackle precisely the problems my hon. Friend raises. A stocktake that I set in motion will be available to the Assembly as it takes up its functions, to inform it as it tries to improve the parlous situation that he describes.

Mr. Nigel Evans: Today, it would seem that the Secretary of State for Wales is hardly responsible for anything to do with Wales. Welsh questions will increasingly become a laughing stock if that is allowed to continue. However, the right hon. Gentleman is responsible for the total block grant out of which health spending comes, so perhaps he can say whether he believes sufficient resources are being spent on the NHS in Wales.
The Secretary of State knows that waiting lists for admission to hospital are getting longer and that each extra person waiting means stress and pain for those involved. On 16 June, David Davies, an Assembly Member, wrote to the right hon. Gentleman about a Newport man who has been told by his consultant that he needs a quadruple heart bypass and that he could die within six months. The man is now on a 10 to 12-month waiting list for an operation at Morriston hospital, Swansea. What will the Secretary of State do? What action will he take to ensure that that life-saving operation is carried out as soon as possible? Is it not time that the Government woke up to the fact that it is waiting times that are important, not merely waiting lists?

Mr. Michael: It is the hon. Gentleman who is a laughing stock—his synthetic anger is pathetic. The Conservative Government failed the NHS in Wales. He is right to say that there is a responsibility on the Secretary


of State to provide resources. Massive additional resources have been provided, but the problem is the state of administration and the financial chaos in which the Conservative Government left the NHS in Wales.
The matters to which the hon. Gentleman refers are not matters for this House, but matters for the Assembly. That is why he quoted an Assembly Member raising the question.

Assisted Area Map

Mr. Barry Jones: When he intends to meet Assembly Secretaries to discuss the assisted area map of Wales. [88527]

The Secretary of State for Wales (Mr. Alun Michael): That is a matter for which my right hon. Friend the Secretary of State for Trade and Industry has lead responsibility, but, as Secretary of State for Wales, I was directly involved in those discussions until 30 June. The Assembly Cabinet will take the matter forward with the Secretary of State for Trade and Industry.

Mr. Jones: Is it not the case that my right hon. Friend has discussed those matters with our right hon. Friend the Secretary of State for Trade and Industry? May I persuade him that it is absolutely vital to my constituency that we retain assisted area status and that we have restored to us objective 2 status, which was taken away five years ago by the previous Administration? Does he accept that Airbus, Raytheon and the many companies on Deeside industrial park need to know that, in the years ahead, my constituency will have assisted area status and objective 2 status, so that we can continue to obtain investment—especially investment from abroad—and the grants available to indigenous industry? May I urge my right hon. Friend to ensure that Deeside remains on the assisted area map?

Mr. Michael: My right hon. Friend always makes the best possible case for his constituency. With him, I have visited both Airbus and Raytheon and I am impressed by their work. Through him, I congratulate the workers at Raytheon on their successes in recent weeks. I can certainly confirm that the best possible case for Wales has been made within Government and that Cabinet colleagues, including the Secretary of State for Trade and Industry, have listened carefully and sympathetically.

Mr. Richard Livsey: As we know, this is a matter for the Department of Trade and Industry. In his discussions with the Secretary of State for Trade and Industry, has the Secretary of State for Wales emphasised the importance of obtaining assisted area status for the upper Swansea valley, which has been badly hit by unemployment? Can he give us any idea when an announcement will be made on assisted area status, which would give a much-needed injection to such areas?

Mr. Michael: Both I and the Under-Secretary, my hon. Friend the Member for Neath (Mr. Hain), as junior Minister responsible have done everything possible within the powers of the Welsh Office and in co-operation with other colleagues to ensure that the enormous problems in the upper Swansea valley are understood and that everything possible is done. I cannot say more than I have

about the short period that we have to wait before the full details are available, but the hon. Gentleman can be satisfied that we fully understand and share his concerns.

Beef Exports

Mrs. Ann Winterton: When he expects exports of beef products to resume from Wales. [88528]

The Parliamentary Under-Secretary of State for Wales (Mr. Jon Owen Jones): A great deal sooner than would have happened under the previous Government. I am pleased with the progress that our Government have made to date towards achieving the lifting of the beef export ban, but these are matters for the Minister of Agriculture, Fisheries and Food and in future he will involve the National Assembly for Wales in his deliberations.

Mrs. Winterton: Despite the Labour Government's boast about the lifting of the export ban way back in November 1998, no British beef has yet reached the continent. The Government have failed to remove any further barriers set up by the European Union. What discussions has the Minister had with the Agriculture Secretary in Wales and the Minister of Agriculture, Fisheries and Food about the future of the calf processing aid scheme? Does he agree that it is vital that that scheme be extended until the export ban is lifted and beef is exported and until the market has righted itself again?

Mr. Jones: We are very near to persuading the EU finally to allow beef to be exported from this country. We expect the first beef to be exported in the very near future—this summer, I hope. The hon. Lady claims that the Government are not succeeding where her Government lamentably failed. They produced the difficulty in the first place, and I think that she should have some shame.

Ms Jackie Lawrence: The hon. Member for Congleton (Mrs. Winterton) has asked a question which I hoped to ask under Question 3. In any meeting with the Agriculture Secretary in Wales will the Minister stress the mature and responsible attitude of the National Farmers Union in Wales, which stated this weekend that any unilateral moves to remove the ban on beef on the bone in Wales could damage the efforts to get the export ban on beef lifted?

Mr. Jones: I endorse my hon. Friend's comments. The NFU has acted extremely responsibly. This is a difficult issue. We are working towards an objective that all the industry would share—the lifting of the export ban.

Mr. Nigel Evans: The Minister makes much of the lifting of the ban. He says that he hopes to see exports in the summer. Let us cut the waffle. The Minister knows that the beef farmers will be listening to what he has to say. Not a single carcase of beef has gone abroad from Wales or anywhere in the United Kingdom for that matter. Will the hon. Gentleman give Welsh farmers a date on which the first beef will be slaughtered and exported from Wales to the rest of Europe?

Mr. Jones: The hon. Gentleman asks for a specific date. I recall that when the Labour party was in


opposition, the Conservative Government constantly referred to a date—a November, I believe it was. The lifting of the ban never came and no beef was exported. The Conservative party seems more interested in renegotiating the treaty of Rome than renegotiating the rights of British farmers. The beef ban will be lifted under the Labour Government soon and farmers know that they can trust the Government to act in their interests, while the Conservative party let them down extremely badly.

Concordats

Mr. Ted Rowlands: If he will make a statement on the preparation of concordats between the National Assembly and Whitehall Departments. [88530]

The Secretary of State for Wales (Mr. Alun Michael): The UK Government expect to send a draft memorandum of understanding and related concordats to the Assembly Cabinet shortly for its consideration. These documents will set out administrative arrangements designed to secure the smooth operation of the devolution settlement.

Mr. Rowlands: During the referendum debates, we made a clear commitment to the people of Wales that there would be a Secretary of State for Wales in this House answerable for all oversight matters in Welsh affairs and other Government Departments. Given the shambles that has occurred this afternoon, will my right hon. Friend make it clear that the Secretary of State for Wales will be accountable and answerable in this House for oversight matters in other Government Departments when they relate to Welsh matters?

Mr. Michael: The only shambles this afternoon has been that hon. Members—mainly Opposition Members—have not understood that devolution has taken place and have asked questions on matters that are for the Assembly, and not for this House.
The answer that I gave indicates that concordats will deal with the relationships between Government Departments and the Assembly, and that will provide the necessary clarity. In many cases, it will be a matter for the Assembly and the Secretaries of State with other responsibilities. However, there is an important role for the Secretary of State for Wales and that will continue.

Dr. Julian Lewis: Is it not a fine state of affairs when a former Welsh Office Minister of the status of the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) sees fit to describe the present arrangements as a shambles? Does not that only go to show what happens when a Government impose, for ideological reasons, a system that is not wanted by the majority of the people in Wales and which squeaked through by only 6,000 votes in the whole country on a tiny turnout, despite the Prime Minister begging his Labour supporters in Wales to let the proposal go through?

Mr. Michael: That question was asked with the flavour of bitterness, arising from the hon. Gentleman's knowledge that his party was swept away so completely at the general election that it does not have a single representative in Wales. Events this afternoon have

demonstrated that the Conservatives have not understood the responsibilities that have been transferred to the National Assembly for Wales, where they are being taken up with vigour. The settlement was not imposed—it was voted on by the people of Wales in a referendum. The hon. Gentleman waving his arms in the Chamber will not change that fact.

Mr. Paul Flynn: When the Secretary of State for Wales next meets the First Secretary of the Welsh Assembly, will he convey the happiness and congratulations of this House on the splendid start made by the National Assembly, which has resulted in growing approval for the idea of devolution in Wales, a new sense of pride and identity in the Welsh nation and, to our great satisfaction, the marginalisation of the Tory party?

Mr. Michael: I thank my hon. Friend for his remarks. I will make sure that they are passed on not just to the First Secretary, but to other Members of the Assembly. His remarks will be appreciated.

Ministerial Duties

Mr. Ian Bruce: What proportion of his working time is taken up by his duties as Secretary of State for Wales; and how he separates his responsibilities to this House and to the National Assembly. [88531]

The Secretary of State for Wales (Mr. Alun Michael): At the present time, my key priority is to achieve the smooth transition from the previous role of the Secretary of State, as it was until 1 July, to the role of the Secretary of State following devolution on the one hand, and to the role of First Secretary of the National Assembly for Wales on the other hand. In both roles, I serve the interests of this House, the interests of the Assembly and the interests of the people in Wales.

Mr. Bruce: I hope the right hon. Gentleman will not take it amiss if I say that it seems extraordinary that a person can be responsible within Cabinet as Secretary of State and as First Minister, where he has a clear responsibility to the Assembly in Wales. Surely this should not continue constitutionally. Why does not the right hon. Gentleman immediately resign from at least one of those posts?

Mr. Michael: That shows the hon. Gentleman's lack of understanding of the process that we must go through. Obviously, he does not understand the versatility that we are able to demonstrate on this side of the House. I have always said that I would step down as Secretary of State for Wales after weeks rather than months, but the experience to date confirms that it was wise to combine the two roles during the period of transition. That is obvious from a Welsh perspective, but not from the jaundiced point of view of the hon. Gentleman.

Barnett Formula

Mr. Elfyn Llwyd: What representations he has received with regard to the Barnett formula in relation to Wales; and if he will make a statement. [88533]

The Secretary of State for Wales (Mr. Alun Michael): There have been a number of presentations, mainly during my predecessor's time when the Government of Wales Bill was under consideration in this House.
The principle behind the formula—that Wales gets a population share of changes in the comparable programmes in England—is clear and easy to understand. Most criticism of the formula confuses the absolute size of the block with the formula for changes. They are two different things.

Mr. Llwyd: I wish to refer to the additionality principle in terms of bringing in further moneys to bring forth objective 1 projects. I seek the Secretary of State's assurance that his office will adhere to the additionality principle, and that any moneys coming in will be over and above those already provided for in the Barnett block.

Mr. Michael: The hon. Gentleman goes off at a tangent. I think that he is referring to structural funds. I can reassure him that the principle of additionality is an obligation on the UK Government, which they will seek to fulfil, as they have in the past. As the Prime Minister stated when he was asked a similar question in Cardiff, the Government will not let Wales down.

Mr. Gareth Thomas: Does the Secretary of State agree that, before we even begin to think of devolution as a process, not a change, the Assembly must be seen to exercise its existing powers effectively? Does he further agree that it can do so only if Wales is sufficiently funded under the Barnett formula, and if sufficient attention is given to matched fnding, particularly in relation to objective 1 funding?

Mr. Michael: My hon. Friend goes off on another tangent. Those are matters that must be dealt with in the process of the comprehensive spending review, when the burdens and the opportunities available will be considered. My hon. Friend refers to the fact that we achieved objective 1 status, which is so important for the valleys of south Wales, for mid-Wales and for north Wales. That achievement was brought about through the success of a Labour Government fighting for Wales. Over the next few years, the Government will continue to pursue the opportunity that it represents, and I am certain that the Assembly will make a massive contribution to ensure that it brings success to the economy of Wales.

Welsh Development Agency

Mr. Nicholas Winterton: If he will make a statement on the Welsh Development Agency's support for the manufacturing sector in Wales. [88534]

The Parliamentary Under-Secretary of State for Wales (Mr. Peter Hain): The Government are giving considerable support to manufacturing in Wales, but the specific measures being undertaken by the Welsh Development Agency are, of course, a matter for the National Assembly for Wales.

Mr. Winterton: I am grateful to the Minister for that somewhat inadequate reply. Does he agree with many business men and women in Wales, as well as business

men and women throughout the United Kingdom, that it is one thing for a development agency to offer some support, and quite another thing for the Government to load industry and business with huge additional on-costs, which totally counter that support and make it more and more difficult for manufacturing industry in this country to compete with countries outside Europe that are not loaded with the huge on-costs so typical of the European Union?

Mr. Hain: I acknowledge the hon. Gentleman's interest in and support for manufacturing throughout Britain, and I am sure that that includes Wales. Will he acknowledge that there is now a better climate in Britain for business, including manufacturers, than there has been for generations? That contrasts starkly with the massacre of manufacturing that the Conservative Government carried out in the early 1980s and again 10 years later. Such a policy destroyed manufacturing. This Government's commitment to a healthy business climate to build a high-skill, high-quality economy throughout Britain, including Wales, is achieving success.

Mr. Huw Edwards: Does my hon. Friend agree that the Welsh Development Agency provides invaluable support to companies throughout Wales, including a company in my constituency, Cambrian Consultants, which last week was presented with the Queen's award for export achievement? Will he join me in congratulating that company on its outstanding achievement?

Mr. Hain: Yes, I will. I acknowledge that success as one of the many successes that businesses are enjoying in Wales, as they strive to turn Wales into a high-quality world-class economy with the backing of the Government's policies.

Care for the Elderly

Mr. Lembit Öpik: What discussions he has had with the Assembly Secretary for Health and Social Services on the provision of care for the elderly. [88535]

The Parliamentary Under-Secretary of State for Wales (Mr. Jon Owen Jones): I congratulate the hon. Gentleman on asking that question during Alzheimer's week. Before the transfer of functions, I had a number of meetings with Jane Hutt, the Assembly Secretary for Health and Social Services. During those meetings, we discussed a wide range of issues that are in her portfolio.

Mr. Öpik: Does the Minister accept that funding on care for the elderly is still far too low in Wales? Indeed, the availability of provision for the elderly in Wales has fallen below that in England. Will he carry on making representations to try to equalise investment in elderly care provision in England and in Wales?

Mr. Jones: I am sure that the Assembly will be very sympathetic to the points that the hon. Gentleman has raised, but it is for the Assembly to decide on the allocation of resources.

Oral Answers to Questions — PRIME MINISTER

The Prime Minister was asked—

Minsterial Visits

Mr. Nigel Beard: What plans he has to visit Bexleyheath and Crayford.

The Prime Minister (Mr. Tony Blair): I have no immediate plans to do so.

Mr. Beard: I am sorry that the Prime Minister will not be coming to Bexleyheath and Crayford. If he were able to do so, he would meet members of a community, which is a cross-section of the whole country, who admire and applaud his strenuous efforts to bring peace to Northern Ireland. When he next meets Unionist and nationalist leaders, will he tell them of the incomprehension, impatience and anger that will be felt in such communities if the best prospect for a settlement in Northern Ireland this century collapses because one side has made no gesture in many months to recognise legitimate concerns for arms decommissioning and the other side is too intransigent to wait 30 days for decommissioning to begin?

The Prime Minister: There are difficult decisions for all sides in Northern Ireland. All I ask is that people keep an open mind and carry on discussing the nature of the legislation with the Government so that we can put proposals that are agreed by everybody to the House next week. I very much hope that that will be the case.

Engagements

Mr. Paul Marsden: If he will list his official engagements for Wednesday 7 July.

The Prime Minister: This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further such meetings later today.

Mr. Marsden: I thank my right hon. Friend for that reply. Does he agree that the health White Paper, which was launched yesterday and aims to save 300,000 lives over the next 10 years, will benefit everyone, particularly people on low incomes and those from socially disadvantaged backgrounds—the same people whom the Tories wrote off when they were in office through their two-tier national health service?

The Prime Minister: We have targets to reduce the death rates from cancer and heart disease. We shall put £60 million directly into services for the three most common cancers and a further £150 million into providing state-of-the-art equipment for cancer treatment. There will be an extra 400 cancer specialists and increased spending on cancer drugs. All that will, of course, take time, but we will end up with a vastly improved service for people suffering from that disease.

Mr. William Hague: Why did the right hon. Gentleman not mention that the waiting list to

see a consultant has doubled since he became Prime Minister? Will he keep on blaming other people or will he and his Ministers take responsibility for that miserable failure?

The Prime Minister: Waiting lists are down as a result of the Government's policies and we are putting an extra £21 billion into the health service—opposed by the Conservative party.

Mr. Hague: It is a good job that there is not a waiting list for a straight answer, or we would be here for a very long time indeed. The number of consultants is down; the number of complaints is up; the waiting list to get on the waiting list has been doubled; junior doctors have been betrayed; the head of the MBA said in his speech on Monday—[Interruption.] The head of the—[Interruption.]

Madam Speaker: Order.

Mr. Hague: The head of the BMA said in his speech on Monday—[HON. MEMBERS: "Hurray!"] I am glad that everybody is listening; listen to the next bit as well. The head of the British Medical Association congratulated the Prime Minister on the fact that
Morale has never been so low".
Will he give the House the figure for the number of people waiting to see a consultant?

The Prime Minister: The waiting lists are 62,000 below the level that we inherited. The present figure is just over 1 million. [HON. MEMBERS: "Give the figures."] I am giving the figures. Average waiting times are now shorter. As for junior doctors' hours, when we came to office, 6,500 junior doctors were working for more than 56 hours a week—an unacceptable figure. Now the figure is 4,800. However, we will continue to bring the figures down. I am pleased to say that only one junior doctor in six works now for more than 56 hours a week, which means that five sixths work for less than that; nevertheless, we will continue to reduce the hours. There are now 2,200 more doctors in the national health service, and, over the next few years, we will introduce 7,000 more.

Mr. Hague: The Prime Minister should be concerned that his officials did not even bother to put the answer to the question in his folder. The answer is this: 456,000 people are waiting to see a consultant. That is 200,000 more since he took charge.
Is not the emerging story of this Government, on this as on so many other things, one of simple incompetence? We have half a million people waiting to see a consultant, half a million people waiting for a passport, and half a billion pounds lost on the sale of the gold reserves. The Prime Minister's problem is that he has a Cabinet full of incompetents, but he can only have one candidate for the post of mayor of London. When will he get rid of those people, and secure people who will actually deliver for the Government?

The Prime Minister: As I have said, the right hon. Gentleman's figures for the waiting lists are wrong. Waiting lists have fallen by 62,000 from the level that we inherited.
The BMA made three criticisms. Let me deal with each in turn. First, the BMA disagreed with the way in which the primary care groups had been set up—but, last year, they voted by three to one to support the reforms. Secondly, the BMA opposed the private finance initiative contracts for the new hospitals. I am proud that we are building those new hospitals, which will deliver better health care for people. Thirdly, the BMA opposed NHS Direct and the new walk-in centres. Those centres, and NHS Direct, are giving ordinary people better access to the health service than they have ever had.
I understand the BMA's concerns, and we are prepared to talk to its members about them, but change is necessary for the improvement of the health service. We shall have 7,000 more doctors, 15,000 more nurses, 31 new hospitals and £21 billion more investment. That is a record of which we can be proud.

Mr. Jonathan Shaw: Does my right hon. Friend agree that, if we are to protect the countryside and rejuvenate our inner cities—as suggested in the Rogers report, "Towards an urban renaissance"—we must deal with a massive anomaly? A builder can construct a new house on a green-field site and be zero-rated for VAT, while renovation of an empty property in an inner city is charged at the full rate of 17.5 per cent. Can my right hon. Friend assure me that the Government will take the matter seriously, and will act at the earliest opportunity?

The Prime Minister: Of course we will take my hon. Friend's points seriously. As he knows, the problem of reducing the rate to zero has been caused by a European regulation. [Interruption.] It was signed by the last Government, I might add.
We are, however, taking two other steps that I consider important. We have refocused the single regeneration budget, and we are putting some £900 million extra into inner-city areas, where we can develop more brown-field sites. Moreover, we have upped the target for brown-field sites to 60 per cent. I believe that those measures will make a difference over time. However, I understand the point that my hon. Friend makes, and I recognise the anomaly to which he has drawn attention.

Mr. A. J. Beith: When the Prime Minister talks of obstructiveness and resistance to change in the public sector, are doctors one of the groups that he has in mind?

The Prime Minister: No, I am not attacking doctors, but let us take the example of the PFI, which they have attacked. We are going to deliver the largest hospital-building programme that the health service has ever seen. We will deliver it on cost and on time. I think that experience shows that such developments, delivered through the private finance initiative, are better for the patient, and therefore better for the health service as a whole. I am not attacking doctors, or any other group of workers; I am saying that we need change in our public services—and this Government, who are putting more money into the public services than has ever been put into them before, are entitled to demand real change in return.

Mr. Beith: Does the Prime Minister not understand that doctors are concerned about future funding for patient

care, as they worry about the much higher long-term costs of paying for hospitals through the private finance initiative? Over time, it costs more to do it that way. Does he understand that junior doctors are similarly concerned about their position? If the scars on the Prime Minister's back were real ones—if he had to go to casualty—would he really want to be treated by a doctor who had been on duty for 34 hours?

The Prime Minister: That is precisely why we are reducing the hours that junior doctors work. We have significantly reduced those hours, but we have to reduce them more. However, we cannot go all the way now, because it takes considerable time to train a doctor—in some specialisms, it takes 10 or 15 years. We are putting in extra investment—which, after all, is the largest three-year additional investment that the health service has ever had. As I said, we are getting in extra doctors and nurses, but that takes time.
I do not agree with the right hon. Gentleman's point on the PFI. If he would go and talk to the people at the PFI site that I visited today at Greenwich, they would tell them that, because of the PFI, the contract will be completed on time and will not have a cost overrun. They would also tell him that care and maintenance are part of the contract, and that the fact that care and maintenance are not done properly in the public sector is one big reason why we do not have the health service that we need.

Mr. Eddie McGrady: I should like, first, to place on record the sincere appreciation of my party and the people whom I represent for the superhuman effort that the Prime Minister, the Secretary of State, the Taoiseach and his Ministers made last week to deliver peace and government in Northern Ireland. I should like also to apologise to the Prime Manor and the House for being absent on Monday and unable to play a supportive role. I hasten to add that my absence was due entirely to aircraft failure.
Does the Prime Minister agree that the way forward document, which he and the Taoiseach produced, at this juncture, shows the best possible way forward for the future of Northern Ireland and for implementing all aspects of the agreement, not only decommissioning—which we all want, desire and need—but the devolved institutions, and other instruments of government, that would have been in place last September, had the spirit of the agreement been fulfilled? It is also the best possible way of ensuring that the process that has been endorsed by the people of Northern Ireland is brought to a successful conclusion, and to test the sincerity of those with arms on whether they will really decommission. The document shows the only way that we can test that.

The Prime Minister: It is important that people should understand that this is the only chance—the only way forward—for Northern Ireland. The agreement allows us to get both devolution of power, which people want, and the decommissioning of paramilitary weapons—not only republican paramilitary weapons, but all paramilitary weapons. As we have said, we shall listen profoundly—we must do; it is our duty—to concerns raised by any group in respect of it. I do believe that it offers the best way forward, and I urge people—all parties—to accept it as such.

Mr. Nick St. Aubyn: At the end of March 1998, no junior doctor at the Royal Surrey hospital worked beyond the 56-hour limit set by the previous Government. Now, over half the junior doctors at our hospital are working beyond that limit. Does the Prime Minister agree with his Health Secretary that care for the old and the sick in places such as Guildford simply does not matter to the Government?

The Prime Minister: My right hon. Friend never said anything of the sort. I do not know the circumstances of that particular hospital, but I shall look into them. However, as I said, the overall national figures show a reduction in the number of doctors working more than 56 hours a week.
The one group of people from whom we shall take no lessons on the health service is the Conservative party. We are making up for 18 years of failure by the Conservative Government. Yes, it will take time to get the hospitals built and the technology in, and to get more doctors and nurses into the health service, but we shall get there because, unlike the Conservative party, we believe in the health service.

Miss Melanie Johnson: As a former inspector for the Office for Standards in Education, I welcome today's Ofsted report on improving standards in our primary schools. Does my right hon. Friend agree that the work of good teachers and the Government's introduction of the national literacy and numeracy hours have brought about the improvements that are benefiting our children?

The Prime Minister: We were very pleased by the Ofsted results, and I believe that even more dramatic change will come over the next few years, partly because of the literacy and numeracy hours and partly because, although under the previous Government's plans spending was cut by £80 per pupil for the past three years, it will rise over the next three years by £200 per pupil. In addition, class sizes are falling for primary school children, and substantial capital investment will mean new buildings and new computer systems in schools. All that will transform the educational standards of our country.

Mr. Christopher Gill: Is it fair that some abattoirs in Britain are charged more than £50 an hour for veterinary supervision while others are charged less than £30? Does the Prime Minister recognise the vital role of small abattoirs, and that damage would be done to the rural economy if they were forced to close? Will he intervene personally to ensure that small abattoirs are not driven out of business by wholly disproportionate and unaffordable Government-imposed meat inspection charges?

The Prime Minister: I understand the hon. Gentleman's point. Charging requirements were introduced in 1995, and they have caused a lot of concern to smaller abattoirs, although I understand that not all small abattoirs pay higher charges than larger ones because inspection charges reflect the cost of providing the service to each premises. However, we are reviewing the charges to ensure that they are fair and sustainable,

and the results of that review will be announced in due course. I am sure that the hon. Gentleman's comments will be taken into account.

Mr. Gerry Sutcliffe: I recently met representatives of the large Serbian community in my constituency who were angered and upset by the tarnishing of the proud name of Serbia. Does my right hon. Friend agree that, rather than wasting money on an inquiry into the Kosovo conflict, the Government should spend more money and more time on support for the growing opposition in Serbia? Would that not prove that the conflict was conducted not against the Serbian people but against Milosevic and his actions?

The Prime Minister: I cannot emphasise too strongly that the conflict was not aimed against the Serbian people, whose second world war heroism we remember well. I hope that people in Serbia recognise that a democratic Serbia, rid of Milosevic, would have a bright future, and that it could be part of the new Balkans that we want. The whole region is less stable while Milosevic remains, and it is in the interests of the Serbian people and the whole region that he should be removed.

Mr. William Hague: Does the Prime Minister personally guarantee that no grammar school will close under the Government?

The Prime Minister: It is not for me to guarantee that. As a result of our proposals, the power to decide lies in the hands of parents.

Mr. Hague: It is a pity that it is not for the Prime Minister to guarantee that. Two years ago, during the Wirral, South by-election, he wrote a letter to parents, saying:
Let me put the record straight. A Labour Government will not close your grammar schools. That is my personal guarantee.
Now, however, campaigns to close grammar schools are run by Labour party activists, and he is the leader of the Labour party. Has the warranty expired on his guarantee, or just on what is left of his principles? My personal guarantee is that I will campaign against his party to save the grammar schools. Will he join me?

The Prime Minister: The right hon. Gentleman is talking complete nonsense, because the Labour Government are not closing grammar schools. At present, the power to close a grammar school lies with the local education authority. The decision then goes to the Secretary of State. Our legislation takes it out of the hands of the local education authority and puts it in the hands of the parents. The party that closed more grammar schools in Britain than any other was the Conservative party.

Mr. Hague: Even if the Prime Minister is not motivated by conviction to help the grammar schools, one would think that he would at least be motivated by shame, because, when the Labour party made that election promise, it lied to people. Is it not time that, instead of hypocrisy, the Prime Minister called off members of the Labour party from destroying some of the best schools in the country, or is it that even he now has no respect for the promises that he made?

The Prime Minister: I repeat to the right hon. Gentleman that, as he knows perfectly well, the Labour


Government have not closed a single grammar school. We have no power to close grammar schools. As I explained a moment ago, the power used to vest in local education authorities; it now vests in parents. It is a decision to be made by parents. So far, they have not chosen to close any grammar school so, I suggest that, rather than raising scare stories, the right hon. Gentleman concentrates on the difference between the Government's education achievements and those of our predecessors. This Government are putting money into all our schools, because we want not just some, but all, our children to get a decent education. As I pointed out a moment ago, the previous Government, of which the right hon. Gentleman was a Cabinet Minister, capped spending per pupil by £80 for all school children. We are raising it by £200 per pupil. That is the difference between a Conservative Government for the few and a Labour Government for the many.

Mr. Mohammad Sarwar: Is my right hon. Friend aware that 1,200 jobs at Kvaerner in Govan are under serious threat? The people of Scotland, my constituents and the work force at Govan shipyard are looking to the Government to do everything in their power to save those jobs. Will my right hon. Friend assure the House that the Government will provide all the necessary support to the work force, who are campaigning with passion, dignity and self-respect to secure those jobs?

The Prime Minister: They certainly are campaigning with passion and dignity. As my hon. Friend knows, we have set up a task force specifically to try to secure the future of the Kvaerner yard. My right hon. Friend the Secretary of State for Scotland is to meet the shop stewards and the task force this afternoon to see how we can plot a way forward for the shipyard. Everyone knows that those skills are valuable to Scotland and to the United Kingdom and we shall do all that we can to keep them.

Mrs. Caroline Spelman: Does the Prime Minister agree with Birmingham's chief education officer, Professor Tim Brighouse, that his Government's abolition of the assisted places scheme has widened social divisions in education?

The Prime Minister: No. If he said that, I comprehensively disagree with him. As a result of abolishing the assisted places scheme and putting the money into reducing class sizes in primary schools, by September there will be about 240,000 fewer five, six and seven-year-olds in classes of over 30 pupils. I believe that that it is important not that we subsidise some children to get a good education, but that we provide a good education for all our children.

Mr. Bob Laxton: I welcome my right on. Friend's announcement this morning of £650 million-worth of private finance initiative investment and contracts in the national health service. In my constituency and in Derby, South and Derby city, the £177 million-worth of investment that will bring together acute services, possibly on one site, will enhance and improve health care in southern Derbyshire. In addition—[Interruption.]

Madam Speaker: Order. The House is getting very impatient because the hon. Gentleman is not putting

a question. This is the first time that he has had the opportunity to put a question to the Prime Minister, and the House should be tolerant—but do put your question now, Mr. Laxton.

Mr. Laxton: Thank you, Madam Speaker.
Does my right hon. Friend agree, that for the very first time in the city of Derby, a community hospital will be created on an existing site and that it is a much-needed—and will be a much-valued—facility?

The Prime Minister: I agree. My hon. Friend is entirely right. Not only will there be a community hospital, but, as a result of the contract that has been announced today, all the acute services for the people of Derby will be on one site, so people will not have to go to different places to get acute service care. Our experience with the private finance initiative is that it delivers the contracts on cost and on time. The previous Government promised all the hospitals, but never started or delivered them.

Mr. Archie Norman: Is the Prime Minister aware that, despite all the hype that we have heard about hospital PFIs, the people of west Kent and East Sussex are in despair over the failure to reinvest in one of the most decrepit acute hospital facilities in the country? What hope can he offer them? Why has every one of the major investments in the NHS announced in the past 24 months been in a Labour-held constituency?

The Prime Minister: Well, there are rather a lot of Labour-held constituencies. The hon. Gentleman talks about the decrepit hospital in his constituency. Does he really believe that it has become decrepit in two years? The problems in the health service are of long standing. We are making a start on putting them right. We are getting new hospitals built, and new doctors and nurses, but it will take time. I say to his constituents what I would say to anybody in the country: if they want the health service rebuilt, they should look not to the people who ran it down for 18 years, but to the Government, who believe in it.

Mrs. Christine Butler: Will my right hon. Friend congratulate nursery teachers, teachers and head teachers in my constituency on the enormous work that they have put into early-years development and numeracy and literacy hours in the primary sector? By this September, there will be fewer than 30 pupils in all classes of five, six and seven-year-olds, and there is enormous expansion in early-years education throughout my constituency. Does he look forward to the next Ofsted report, which will mark even greater strides forward in raising standards in basic skills in the primary sector?

The Prime Minister: When we came to office, half a million five, six and seven-year-olds were in classes with more than 30 pupils, education funding was being cut and almost half our 11-year-olds were leaving primary school without proper literacy and numeracy skills. We are getting class sizes down and improving literacy and numeracy, which will mean a better-educated and more prosperous country for the future.

Mr. Michael Jack: Britain's dairy farmers are in crisis, owing to the Government's failure


to assist them over matters connected with the reform of the common agricultural policy, bovine tuberculosis and the lowest milk prices in Europe. When members of Milk Marque want to tackle that problem by investing in more dairy production capacity, the Secretary of State for Trade and Industry appears to rule out farmers doing something to help themselves. Will the Prime Minister ask the Secretary of State to reconsider the matter and ensure that our dairy farmers can invest in themselves?

The Prime Minister: Obviously, the Secretary of State has to take into account the recommendations of the

Monopolies and Mergers Commission, and the right hon. Gentleman would expect that. I understand his claim that we should put Government money into the dairy sector. [Interruption.] I am sorry, but dairy farmers will invest in the sector only on the basis that they have set out, which is contrary to the MMC report. If the Government failed to take account of the MMC report and ignored it, many consumers would rightly be angry with us. We will listen to the concerns of the dairy industry, but we also have to act on the recommendations of the Monopolies and Mergers Commission. We would be wrong to ignore them.

Libya

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Robin Cook): With permission, Madam Speaker, I should like to make a statement on relations with Libya. I am grateful to the Opposition for agreeing—[Interruption.]

Madam Speaker: Order. This is an important statement. Those hon. Members who are leaving the Chamber must please do so quietly and quickly, as those who are remaining want to hear the statement.

Mr. Cook: Thank you, Madam Speaker. You anticipated me, as I was saying that I was grateful to the Opposition for agreeing to this important statement being made on a Supply day.
For over a decade, two separate issues have prevented us from maintaining normal diplomatic relations with Libya. One of those was the refusal by Libya to hand over the two men charged with responsibility for the bombing of Pan Am flight 103 over Lockerbie. As the House will be aware, the diplomatic stalemate over this issue was broken by our initiative in offering a trial under Scottish law in the Netherlands. Intensive and patient diplomacy produced an agreement by Libya in April to hand over both suspects. The two accused are currently held in the court complex at Camp Zeist, where we expect their trial to commence early next year. This will give the relatives of those who died and the public their first opportunity to hear all the evidence that we hold.
United Nations sanctions were imposed on Libya in 1992 as a result of its refusal to comply with the investigations into the Lockerbie bombing and the parallel UTA case. Following the surrender of the two accused, UN sanctions on Libya have been suspended.
However, diplomatic relations between Libya and the United Kingdom had already been broken off before the Lockerbie bombing. They ceased in 1984 when we broke off diplomatic relations over the refusal by Libya to co-operate with the investigation into the killing of WPC Yvonne Fletcher, who was shot while carrying out her duties in front of the Libyan People's Bureau in St. James's Square.
In the weeks since the handover of the two Lockerbie suspects, we have been engaged in repeated exchanges with the Libyan Government in an attempt to secure their co-operation with the police investigation. Throughout these negotiations over some weeks, we have consulted fully with the Metropolitan police and, through them, with the Fletcher family. Earlier this afternoon, I met Mr. Obeidi of the Libyan Government, and we have finalised a joint statement.
In that statement, Libya accepts general responsibility for the actions of those in the Libyan People's Bureau at the time of the shooting. It expresses deep regret to the family of WPC Fletcher for what occurred and offers to pay compensation now to the family. Libya agrees
to participate in and co-operate with the continuing police investigation and to accept its outcome".
I have placed in the Library a full text of the joint statement. It fully meets the objectives pursued by successive British Governments since 1984, and it is

supported by the Metropolitan police and the Fletcher family. No amount of payment can ever compensate the Fletcher parents for the loss of their daughter, but the agreement to make compensation now is welcome as a recognition by Libya of its responsibility.
The way is now open for the police to pursue their investigation into the killing of Yvonne Fletcher. That investigation will be pursued as far as it can and we expect Libya to co-operate at all stages of the investigation.
The two agreements that we have secured open the way for us to resume diplomatic relations with Libya. I am upgrading immediately the British interests section in Tripoli to embassy status. We will, as quickly as practical, appoint an ambassador and bring the embassy up to full strength. As a result, the 4,000 or so British citizens who are resident in Libya will have restored to them full consular protection, and we will be able to provide appropriate support to British commercial interests. Full diplomatic representation will also enable us better to monitor Libyan co-operation with the Lockerbie trial and the police investigation into the killing of Yvonne Fletcher.
Today's announcement brings to an end 15 years throughout which relations between our two countries were suspended. I should like to thank the Government of Italy for their assistance throughout those years as the protecting power of British interests in Libya.
I ask the House again to pay tribute to Yvonne Fletcher, a young woman who gave her life in the service of law and order. Her family have suffered not only her loss, but the added pain of 15 years in which its investigation has been blocked. They have borne it with dignity and fortitude. I express on behalf of the whole House our deep sympathy to them. I hope that the agreement that we have secured today will open the way for them to learn more about what happened on that fateful day.

Mrs. Cheryl Gillan: I thank the Foreign Secretary for his kind words and his courtesy in providing advance notification of today's joint statement. Both the last Conservative Government and the present Labour Government have striven to reach this point. On behalf of the official Opposition, I therefore welcome the progress in Anglo-Libyan relations that is contained in the declaration, which, in effect, restores normal diplomatic relations between our two countries.
It has always been our view that Libya should express regret about, and accept responsibility for, the appalling murder of WPC Yvonne Fletcher, as well as co-operating in the investigation into her murder. The Foreign Secretary has announced that the investigation will be pursued. To what degree can he expect co-operation from Libya to identify the murderer? Does he believe that the murderer will now be brought to justice? If so, will he confirm that the procedures that are in place for the trial of the Lockerbie suspects could be used to try any person who is accused of her murder?
The relatives of those killed in the bombing of Pan Am 103 will follow developments closely. What discussions has the Foreign Secretary had with those relatives, and what has been their reaction to the compensation to Yvonne Fletcher's family, which is symbolic of the guilt of Libya?
The Foreign Secretary has referred to United Nations sanctions against Libya, which are only suspended, not lifted. Does he intend to press for sanctions to be lifted? Has he had an opportunity to discuss that with the United States Government?
There has been undisputed evidence of Libyan support for terrorists, particularly the IRA. Will the Foreign Secretary assure the House that all training of terrorists and material support to terrorists has now been stopped, including support to rebel groups in west Africa?
On the future, and the restored links between our two countries, will the Foreign Secretary clarify the status of the business delegation that has been proposed by the British Libyan business group? There was some confusion, I understand, between his Department and the Department of Trade and Industry earlier this week. Does that delegation now have his support?
We welcome the fact that the 4,000 British citizens who are working in Libya will now have British consular protection. Conservative Members hope that the restoration of full diplomatic ties will prove to be a turning point in our relations with Libya and in Libya's relations with the rest of the world. Libya will be watched very closely.
Finally, we are pleased that the outcome has the endorsement of the Fletcher family. I join the Foreign Secretary in paying tribute to them and to Yvonne Fletcher. Even now, although we are moving on to the next chapter, I do not believe that anyone in this House will forget the brave WPC who, in doing her duty, paid with her life.

Mr. Cook: I am grateful to the hon. Lady for her approach to this issue and I very much welcome the sentiments expressed in her closing remarks, which are shared by hon. Members throughout the House. The hon. Lady asked a number of questions and I will try to respond to them all as briefly as possible.
First, we expect Libya to honour its commitment to co-operate fully with the police investigation at all stages. That must include the final stage if any individual is identified by the police.
I do not think that it would be feasible or helpful to wrap up any proceedings with the trial that has been set up for the Lockerbie bombing. That was set up under the Security Council resolution that refers only to that bombing. In any case, there is the difficult question of jurisdiction. We have already managed to achieve legal history by carrying out a trial under Scottish jurisdiction in the Netherlands. We could not extend that to include English jurisdiction because of the killing of Yvonne Fletcher.
On the relatives of those involved in the Pan Am bombing, I assure the House that we contacted them in advance of the statement to inform them that we intended, in the light of the agreement, to resume diplomatic relations with Libya. Among British relatives of those who died, we are not aware of any dissent from the course of action that we propose to take. As the House will know, they warmly welcomed the initiative that we took to secure the trial.
On United Nations sanctions, those are suspended to all intents and purposes. When we reached agreement on the Lockerbie trial we undertook that if the Secretary-General

reported that Libya had complied with the Security Council resolutions of 1992, Britain would support the lifting of sanctions. That remains our position. The Secretary-General has not yet been able conclusively to say so, but when he does we will support the lifting of sanctions.
On Libyan participation in terrorism, I refer the House to what is said in the joint statement that I have placed in the Library. In that statement, Libya condemns terrorism and pledges to co-operate in the international fight against it. The very clear statement that we have secured amounts to the renunciation of terrorism, which has been sought repeatedly in the past decade and has on previous occasions been volunteered by Libya. With our new diplomatic channels in Libya, we will do everything that we can to ensure that both countries fight against the support of terrorism.
On the British Libyan business group, the proposal for that visit was first put to the Government in May. Both the Department of Trade and Industry and the Foreign Office took exactly the same position. The standard position of Governments throughout the years since 1984 has been that we will neither support nor discourage trade missions. That was the view that was clearly expressed to that group. Last week, when it became clear that we were getting close to an agreement, both the DTI and the Foreign Office relaxed our comments on the trip. I understand that the business visit is proceeding at present.
That is now history. As a result of the agreement that we have secured today and of the strengthening of diplomatic channels, we are in a position properly to support commercial interests and trading missions for the future.
Finally, I welcome the hon. Lady's welcome for the agreement that we have secured today. It marks a significant step forward. For the first time, Libya has acknowledged responsibility for what happened on that day. Libya has also offered compensation from the Libyan authorities, as opposed to an ex gratia payment without the acceptance of responsibility. Libya has for the first time given a commitment to take part in the police investigation and to accept its outcome. All those four points are substantial steps forward and give us a firm basis on which we can proceed to normalise our diplomatic relations.

Mr. Tam Dalyell: Having had various Adjournment debates on the tragic death of WPC Fletcher, I pay tribute to the courage and dignity displayed throughout by Queenie Fletcher, her husband and family. May I clarify something that seems unclear? In his statement, the Foreign Secretary said that "general responsibility" had been accepted by the Libyans for the actions at the time—I think that those were his words. The Opposition spokesman talked in terms of Libyan guilt. Will my right hon. Friend clarify whether the Libyans have accepted guilt? As I understand it, the testimony that was given on film by Huw Thomas, formerly the surgeon in Belfast, by George Stiles, the senior ballistics expert of the British Army, and by Professor Bernard Knight, the Home Office pathologist, at least raises questions.
I pay tribute also to David Veness and his colleagues, whom I went to see in Scotland yard. I see the Home Secretary nodding. Indeed, I pay tribute to my right


hon. and hon. Friends in the Foreign and Home Offices for the seriousness with which they have tackled this issue. Could there be clarification on the issue of responsibility and exactly what the Libyans have accepted?
I should like to ask a final question of which I gave the Foreign Office notice once the statement went up on the Board. Are there likely to be, along the lines suggested by Professor Robert Black, the educational and cultural exchanges that are yearned for?

Mr. Cook: When Mr. Obeidi called on me earlier today, he expressed voluntarily his appreciation of Britain's acceptance of a large number of students from Libya to study in Britain. Even under present circumstances, 500 students from Libya are attending full-time courses in Britain. I very much hope that, with the normalisation of diplomatic relations, we will be able to intensify that base, which is already strong. I assure my hon. Friend that I should imagine that the new ambassador will want to give high priority to promoting cultural exchanges where appropriate.
My hon. Friend mainly focused on the question of guilt. Guilt is of course a particularly narrow term, which identifies the criminal responsibility of an individual or individuals. We are dealing with the acceptance of responsibility by a whole Government for the action of their agents. In that sense, the statement that I have placed in the Library, which hon. Members may examine, is quite explicit. Libya acknowledges the verdict of the coroner's court that the bullet was fired from within the Libyan People's Bureau, and accepts general responsibility for those who were in the bureau at the time. That is a satisfactory acceptance of responsibility. The issue of individual guilt is one for the police investigation.

Dr. Jenny Tonge: I thank the Foreign Secretary for his statement and for allowing us to have sight of it before he announced it in the Commons. We of course welcome the resumption of diplomatic relations with Libya and the terms of the agreement. That is very good news. We send sympathy to WPC Fletcher's family for what must have been terrible times for them.
Although we accept that the negotiations must have been difficult and sensitive, does the right hon. Gentleman understand the desire of British business not to lose out on trade to its competitors? Does he realise the confusion that surrounded the trip to Libya organised by the British Libyan business group this week? Will he reaffirm that, now that the agreement has been reached, the Department of Trade and Industry and the Foreign Office will get their act together and give a clear signal and support to British companies?

Mr. Cook: I am happy to agree with the hon. Lady on what she says in respect of the Fletcher family. They will appreciate that those in all quarters of the House have expressed sympathy and support for their conduct over the past 15 years and the trial that that must have been to them.
I say bluntly to the House that the Government have nothing to apologise for on the question of the British Libyan business group. The visit was proposed in May, when we had only commenced discussions on whether we

could reach a resolution of the matter of the killing of WPC Fletcher. It would have been quite wrong for the Government at that stage to encourage a parliamentary visit when we were still unable to get agreement from Libya on this question. Indeed, if we had done so, we would have been subject to much greater criticism in the House. There has been no confusion between the two Departments. Both Departments took that view in May and last week both decided that the time had come to relax it.
One consequence of that outcome is that we shall be better placed to support trade missions and our commercial interests. That is not why we sought the agreement. We sought it to do justice to the memory of Yvonne Fletcher. We sought an agreement on the Lockerbie bombing to take the course of justice forward. However, we should not regret the fact that one consequence of the agreements is that we shall be able to compete on equal terms with our trading partners in Libya.

Mr. Gerald Kaufman: Is my right hon. Friend aware that when I was shadow Home Secretary it was my responsibility to attend the siege of St. James's square, when a leafy part of central London was turned into a killing field, and that I later represented our party at the unveiling of a memorial to WPC Fletcher there? Is he further aware that when I was shadow Foreign Secretary it was intimated to me that if I were to travel to Libya, compensation for WPC Fletcher would be handed over to me, but I decided that it would not be acceptable to do that because we did not have diplomatic relations with Libya and because a behind-the-door approach to dealing with the problem would not entail Libya accepting responsibility, which it has now done? While we shall continue to mourn for WPC Fletcher, we have now seen a country that was outside the rule of international law voluntarily return within the rule of international law. Other countries, including Iraq, should pay attention to that.

Mr. Cook: I am well aware of the part that my right hon. Friend played at the time. This morning I re-read his observations in the House of Commons at the time of the original statement. I am also well aware of the monument to which he refers, as it is within walking distance of my official residence and I have passed it many times. We should all recognise that we would not do justice to the memory of Yvonne Fletcher by allowing the matter to continue in abeyance without attempting to find a way of resolving it and taking it forward. The agreement that we have secured today is a good way of trying to establish the truth and making sure that, in honour of Yvonne Fletcher and the pain of her family, we can take forward our relations with Libya. I agree with my right hon. Friend that there is a message in what has happened. Even Governments who have put themselves outside the circle of acceptable international relations can be brought back in. The more we succeed in doing that, the more we shall be able to offer security to people around the world.

Sir Teddy Taylor: Does the Secretary of State agree that an apology is not a new development? Many years ago, shortly after the tragic death of Yvonne Fletcher, the Libyans offered a personal apology, accepting responsibility and offering a


payment to a police charity rather than to the family. By responsibility, did the Libyan authorities—Mr. Obeidi—in particular, say specifically that they accepted that the bullet came from within the embassy? That is desperately important, in view of the right hon. Gentleman's answer to the hon. Member for Linlithgow (Mr. Dalyell). My understanding is that in all previous statements the Libyan authorities did not imply that.
I greatly appreciate the initiative that the Foreign Secretary has taken, as compared with what has happened in the past. Will he take every possible step to ensure that the agreed rules and safeguards in the trial at The Hague are carefully observed, particularly in view of the reports of one or two incidents over the past few days? Will he do all in his power to make sure that the safeguards that he offered are applied?

Mr. Cook: I assure the House that, as well as the Foreign Secretary, there will be a number of Scottish trial judges present who will certainly wish to insist on proper rules of procedure. I have every confidence in their doing so. On the custody of the two accused, I gently say to the House, without divulging the details, that the reported breach of security was of a minor and technical character. I remain confident of the security arrangements that we have prepared at Camp Zeist.
The hon. Gentleman asked to what extent the agreement was an advance on previous offers. I acknowledge that, in 1991, he obtained an offer of payment from Libya. The agreement that we have secured during these discussions goes further than that in the following ways. First, the offer in 1991 was for an ex gratia payment which was to be channelled, not directly to the Fletcher family, but through the police fund. This agreement is for something that is described explicitly as compensation and goes directly to the Fletcher family. It recognises the greater extent to which Libya now accepts responsibility for the killing of WPC Fletcher.
Secondly, in the text of our agreement, Libya agrees to co-operate with the police investigation and to accept its outcome, which is specifically stated. Whatever other facts may emerge from further police investigation, I do not think that anybody, including Libya, can be in any doubt that the police investigation will confirm the coroner's verdict that the bullet was fired from within the Libyan People's Bureau. I welcome this step forward. It has enabled us to make progress in our relations, but I must tell the hon. Gentleman and the House, that this represents a significant step forward in agreements that we have been able to secure from Libya so far.

Mr. Roger Casale: I join hon. Members in welcoming the restoration of diplomatic links with Libya. On behalf of the British-Italian parliamentary group, of which I am chairman, I join the Foreign Secretary in paying tribute to the work of the Italian Government in protecting British interests in the intervening years. Does the Foreign Secretary agree that the forthcoming British-Italian summit offers a good opportunity for our Government to renew their commitment and support for Italian initiatives within the

common foreign and security procedures and other mechanisms to create an area of freedom, security and justice across the Mediterranean?

Mr. Cook: My hon. Friend draws attention to what I believe is a new development in our relations, the British-Italian summit, which we will be hosting in Britain shortly. It will give us an unprecedented opportunity to take forward a number of the wider European issues.
I take this opportunity to echo the appreciation that my hon. Friend has given to the Italian Government for acting as our protecting power. In fairness to the Government of Italy, I do not think that they understood at the time how long that commitment might last, but, throughout those 15 years, they have never resiled from their commitment to act as our partner and friend within Libya. My friend and colleague, Lamberto Dini, was also helpful in interceding with Libya in part of the negotiations over the Lockerbie trial. I have written to him this week giving him advance notice of this statement and thanking him for all the help that Italy has given us over the years.

Mr. Douglas Hogg: The right hon. Gentleman has told us that the Libyan Government will co-operate with the investigation and abide by the outcome. It would be helpful if he could tell the House what is meant by that. Are potential witnesses to be questioned by officers of the Metropolitan constabulary? Are potential witnesses to come to the United Kingdom for that purpose or are officers of the Metropolitan force to go to Libya? If there is a prima facie case against one or more individuals, will they, if necessary, waive diplomatic immunity and submit themselves for trial in the United Kingdom courts?
The House will know that the Libyan Government provided large quantities of arms to the IRA. Will the Foreign Secretary tell the House whether the Libyan Government are proposing to set up a fund to compensate the families of those murdered by those arms?

Mr. Cook: I thank the right hon. and learned Gentleman for his questions. I remind him that Libya's support for the IRA was dealt with by the Government of whom he was a member in 1995. That Government then said that they were generally satisfied with Libya's response and the information it had provided on previous links with the IRA. That Government regarded the matter as closed and I do not have a basis on which to seek to reopen it.
On diplomatic immunity, if I recall correctly, in 1984 the previous Government contested the right of those in the bureau at the time to demand diplomatic immunity and we would not seek to change such a view. The investigation is a matter squarely within the hands of the Metropolitan police. I can only tell the right hon. and learned Gentleman and the House that they have fully supported this statement and will be making their own statement of welcome today. Of course, a commitment to co-operate with the investigation must, by definition, mean making witnesses available for interview. I hope that that will take place. If it does not, we will remind the Libyan Government of their commitment.

Mr. Dale Campbell-Savours: I think that we should readily seize this window of opportunity to redevelop the historic relationship that we had with Libya before these recent difficult times. In that light, may I take my right hon. Friend back to the issue of the Inter-Parliamentary Union? Is he prepared personally to raise with the executive of the IPU the need to bring in a delegation of parliamentarians from Libya, so that they can mix with those here and recognise that, here in this Parliament, there are friends of Libya who want to put all these matters behind us as soon as possible?

Mr. Cook: I absolutely concur with my hon. Friend. If we are to have successful diplomatic relations it is important that they do not consist merely of Government-to-Government contacts, but include contacts between our peoples, our cultures and our Parliaments. I am well aware from my experience in several countries around the world that contact between parliamentarians is an extremely useful parallel to my discussions with Ministers.

Rev. Martin Smyth: I join in congratulating the Foreign Secretary on the report, especially on the reference to co-operation in dealing with terrorism. As one who understands how a family feels when a serving member of a police service suffers and is killed, my sympathy goes out to the Fletcher family, and I am delighted that that chapter is closing.
However, in his response to the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg), the right hon. Gentleman said that the previous Government had accepted Libya's earlier explanations about Semtex. I ask that that issue be kept open and that contacts continue to be made. It may be that we shall all have to face again the use of Semtex, either on the mainland or in Northern Ireland, so it would be helpful to know about sources and movers, so that they might be brought to justice.

Mr. Cook: If an occasion arises when it would be useful to seek information from the Government of Libya in that context, we would certainly do so. After today's statement and with the resumption of direct representation in Tripoli, we are better placed to do so. The previous Government noted that there were some omissions from the information provided in 1995, although it was generally satisfactory. I agree that, if further information can be useful in our fight against terrorism, it is open to us to go to the Libyans and seek their assistance.

Mr. Nicholas Winterton: As a Back Bencher who has followed the difficulties between this country and Libya over many years, I congratulate the Foreign Secretary most warmly on his statement to the House this afternoon. I believe that objectives that are satisfactory to all the parties involved have been achieved, which might indicate that Libya is once again re-entering the civilised world.
Will the Foreign Secretary answer this direct question, which is of the utmost importance: does he believe that the agreement with Libya delivers a kick in the teeth or a blow to international terrorism, and that it may deprive international terrorism of supplies of weapons, as mentioned by the hon. Member for Belfast, South

(Rev. Martin Smyth)? Would not such a blow to international terrorism be to the benefit of the world as whole?

Mr. Cook: The hon. Gentleman echoes a point put to me earlier by my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman), which is that the more we embrace countries in the fight against terrorism, the more we isolate those countries that are prepared to support terrorism. One of the issues that have brought Libya to the present agreement is that it has become conscious that it, too, can be a victim of terrorism, and that it is in the interests of all of us to fight terrorism together with equal determination.
I have been informed that the Metropolitan police investigation will initially be carried out through written commission interrogatories. Those will include requests for written witness statements.

Mr. Peter Bottomley: I join in welcoming what the Foreign Secretary and his colleagues have achieved. Those who have kept the flowers at Yvonne Fletcher's memorial in St. James's square will understand the various considerations and the progress that have made his statement possible. Doubt remains in respect of diplomatic immunity: we do not believe that the people in the Libyan People's Bureau had it, but, if it is claimed, can it be waived by the individual who is charged, or can it be waived only by a Government?
On a broader point, does the Foreign Secretary understand that Governments and people opposed to Governments or people with political causes will continue to believe that London is a place where they can get publicity and public attention by committing the sort of violence that we witnessed at the Iranian embassy, the Libyan People's Bureau, the Israeli embassy and elsewhere? Will he confirm the continuing promise of British Governments that there will be an intensity and a persistence in pursuing those who use London as one of the world's killing fields so that people will not expect to get away with it?

Mr. Cook: I can certainly give the hon. Gentleman the assurance that the Government will do everything possible to combat terrorism here and abroad. Britain has had too sad and too much experience of terrorism at first hand not to understand the importance to other Governments of our assisting them wherever it is possible to do so within the law in their fight against terrorism. I fully agree with the hon. Gentleman on that point.
I, too, have noticed that the flowers at the memorial to WPC Yvonne Fletcher have remained throughout the 15 years, and I am sure that they will continue to do so. They are a mark of the esteem in which she was held by her friends and colleagues. It is important that if we close this chapter, we do so in a way that does justice to what happened to her.

Mr. Edward Garnier: Are those suspected of the murder of WPC Fletcher resident in a country with which we have an extradition treaty? If so, will the authorities apply for her extradition? If they are not, what does the Foreign Secretary propose to do?

Mr. Cook: It is a bit premature at the start of the police investigation to identify those who may or may not be


charged with individual responsibility for WPC Fletcher's murder. We have no extradition treaty with Libya. That has been precisely at the heart of our difficulty in the past 10 years in the case of the Lockerbie bombing, which we have now resolved through negotiation. I cannot anticipate what action will be open to us in the event that the police investigation concludes that charges can be brought.

Speaker's Statement

Madam Speaker: I have to acquaint the House that I have received the following letter from Mr. Peter Jennings, our Serjeant at Arms:
I write to confirm that I wish to retire on 31 December this year, when I shall be 65.
I have been highly privileged to serve the House for over 22 years, most recently in a senior capacity. I would like to thank all members of the House staff, particularly those in my Department who have so ably helped me to discharge my duties. I also include the Metropolitan Police Division whose staff provide security here and the Post Office staff who provide our mail services. It has been enormously rewarding to lead such a dedicated and diverse team and see how all those involved in it have developed to meet the ever increasing demands placed on them to meet the Departmental objective of providing 'the best possible service'.
May I finally record my appreciation for the many kindnesses shown to me during my time here and particularly for all the support which you personally have given me during my time as Serjeant.
There will be an occasion to pay formal tributes in due course. Meanwhile, consultations on the recommendation for a successor to Mr. Jennings are taking place through the House of Commons Commission.

Points of Order

Mr. Ted Rowlands: On a point of order, Madam Speaker. May I raise with you the issue that arose in Welsh questions today, especially on Question 3 from my hon. Friend the Member for Preseli Pembrokeshire (Ms Lawrence). The question was when the Secretary of State for Wales next intended to meet the Assembly Secretary responsible for agriculture. I did not quite catch all of my right hon. Friend's reply, but it appeared that he said that it was a matter for the Assembly. You subsequently intervened and said that we therefore could not continue to question him.
It is patently not a matter for the Assembly what action the Secretary of State for Wales in this House does or does not take. It is surely open to my right hon. Friend as Secretary of State for Wales to seek a meeting of any kind. As he is accountable to this House, we are entitled to ask him about such meetings.
The question was put to the Table Office and approved. I hope that you will give us a ruling that a question such as Question 3 will be perfectly in order in future Welsh Question Times and that future Welsh Secretaries of State can come to this House and answer questions.

Sir Patrick Cormack: rose—

Madam Speaker: I think that the hon. Gentleman wishes to make a similar point of order.

Sir Patrick Cormack: We realise that, after 1 July, with devolution, we are entering uncharted waters. We are grateful to you for the guidance that you gave the House this afternoon, but, as the Welsh Assembly does not have primary legislative or tax-raising powers, Members of this House will obviously wish to ask questions and hold Ministers properly to account. I wonder whether you would be kind enough to give some thought to this matter, and to give some guidance to the Table Office so that inappropriate questions are not allowed on the Order Paper and so that all those that do appear on the Order Paper can be pursued.

Mr. Dafydd Wigley: Further to that point of order, Madam Speaker. I come to this matter as a Member of the National Assembly as well, and questions have arisen as to what competence lies where. Will you discuss the implications of this matter informally with representatives of the parties—and, perhaps, with the usual channels—so that we can have some convention, whereby we know where responsibility lies?

Mr. Dale Campbell-Savours: Further to that point of order, Madam Speaker. If money is voted by Parliament, on what basis can there be any restriction on asking a Secretary of State questions on the use of those moneys?

Madam Speaker: The hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) asked for a ruling, and I am always prepared to give a ruling. On more than one occasion today, I heard a Minister of the Crown say at the Dispatch Box that, as of 1 July, matters had been

devolved; therefore, it was not possible for the House to trespass on matters that are the responsibility of the Welsh Assembly. Of course there are bound to be some problems when such changes are being made. I thought that I had had proper discussions with the Department concerned, and with the Table Office. Obviously, we have a long way to go to bring about improvements. However, the House can be sure that I shall use my best endeavours to see that the matters are dealt with efficiently and properly at Question Time in future.

Mr. Campbell-Savours: Further to that point of order, Madam Speaker. Could I have a written, considered response to the question I asked of you—namely, the question of moneys voted by Parliament?

Madam Speaker: Certainly. I shall look at the precise wording of the hon. Gentleman's question and see that he gets a written response.

Mr. Rowlands: I am grateful for your initial response, Madam Speaker. However, my point is narrow and specific. Question 3 was about whether the Secretary of State for Wales would seek a meeting with X, Y or Z. That is a matter for the Secretary of State for Wales, who must be accountable and answerable to this House. I should have thought it possible for us to say that such a question was in order because it related directly to the activities of the Secretary of State, who is answerable to this House.

Madam Speaker: I understand, and am sympathetic to, the hon. Gentleman's point, but I repeat what I said earlier. If a Minister of the Crown tells the House that an issue has been devolved, it is for that Minister of the Crown to know whether it is devolved or not. I cannot intervene on that. I am trying to be helpful, and I will look at the matter to see that we run smoothly in future.

Dr. Evan Harris: On a point of order, Madam Speaker. A few moments ago, the Prime Minister, in answer to my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith), said that the number of junior doctors working more than 56 hours had fallen to 4,800, but we had established that the figure was 8,500—

Madam Speaker: Order. Points of order are matters with which I can deal. I am not a statistician—I do not know the figures. If the hon. Gentleman wishes to correct the Prime Minister, he must do so by means of the Order Paper and other questions, and not by means of a point of order.

Dr. Harris: rose—

Madam Speaker: Is there a point of order for me as Speaker?

Dr. Harris: Yes.

Madam Speaker: Then I shall hear it.

Dr. Harris: What is the procedure for asking the Prime Minister to come back and reassure the House that if he has inadvertently misled—

Madam Speaker: Order. I thought that I had just explained that if the hon. Gentleman feels that the answer


was not full enough or informative enough—or even if he feels that it might have been incorrect—there is an Order Paper by which he can put written or oral questions to the Prime Minister, or to the Minister with that portfolio. That is the way to proceed.

Sir Patrick Cormack: On a point of order, Madam Speaker. I am grateful for your response to the points of order on Welsh Questions. Could you please copy to those involved the letter that you send to the hon. Member for Workington (Mr. Campbell-Savours), and place a copy in the Library?

Madam Speaker: Certainly.

Royal Hospital, Haslar

Mr. Peter Viggers: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 24, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the closure of the intensive care unit at the Royal Hospital, Haslar, in my constituency.
Since the Ministry of Defence announced in December its intention to close the only remaining military hospital, the whole area has been united in its determination to reverse the decision. There are two reasons for that. First, the area has the strongest defence links, and those who serve in the defence medical services and those who care for our defences are distraught that the announcement, which has already led to the resignation of 15 consultants, will have a devastating effect on defence medical services and on our defence forces generally.
Secondly, Gosport will lose its main hospital with superb facilities, on which £35 million has been spent in the past 10 years. The most emotive aspect is the fact that Gosport will lose its accident and emergency cover. There is absolutely no doubt that lives will be lost in ambulances on the congested roads between Gosport and the remaining local hospitals, if the accident and emergency unit at Haslar should close.
We heard this morning that the intensive care unit at Haslar is to close shortly because of lack of staff. The announcement could have been made last Thursday when we had a meeting with all those concerned, including the head of the Defence Secondary Care Agency. The announcement might have been made on Monday, when the Minister for the Armed Forces appeared before the Select Committee on Defence with all his staff to answer concerns about defence medical services. However, the matter was left for us to discover today.
This is the latest chapter in a sad story of botch and bungle. The Ministry of Defence failed properly to consult with the national health service before announcing the hospital closure. Caught out, Ministers at the Department of Health have given repeated promises that medical care will not deteriorate after the closure of Haslar hospital, but of course it will. It cannot do otherwise.
Words cannot express the anger and frustration felt by my constituents in the face of this terrible blow to their health care. I therefore ask for the House to adjourn to allow full debate on the matter, which is of such importance to defence medical services and to all people in the area.

Madam Speaker: I have listened carefully to what the hon. Gentleman said, and of course I must give my decision without stating any reasons. I am afraid that I do not consider the matter to be appropriate for discussion under Standing Order No. 24. I therefore cannot submit the application to the House.

BILL PRESENTED

RAILWAYS

Mr. Secretary Prescott, supported by the Prime Minister, the Chancellor of the Exchequer, Mr. Secretary Straw, Mr. Secretary Byers, Mr. Secretary Reid, Mr. Secretary Michael, Mrs. Helen Liddell and Ms Glenda Jackson, presented a Bill to establish the Strategic Rail Authority and make other provision about railways: And the same was read the First time; and ordered to be read a Second time tomorrow, and to be printed [Bill 133].

Empty Homes

Mr. David Kidney: I beg to move,
That leave be given to bring in a Bill to make provision for reducing the incidence of vacant dwellings; to extend the duties and powers of local authorities to that end; to require local authorities to publish empty homes strategies and to exercise their duties and powers in accordance with those strategies; and for connected purposes.
The Bill is my contribution to stopping the unnecessary building of new homes on green-field sites. We should first make the best use of existing properties standing empty. It is also my contribution to trying to ensure that all our citizens have access to decent homes that they can afford.
I know from a housing development that is taking place in Stafford just how strongly residents feel about new building on open fields on the edges of our towns and cities. Such developments detract from urban regeneration, encroach on our countryside and increase traffic.
According to the written answer to a recent parliamentary question from the hon. Member for West Worcestershire (Sir M. Spicer), there are more than three quarters of a million properties standing empty. That figure has remained fairly constant for years. Six out of every seven of them are privately owned.
The hon. Gentleman also asked why more cannot be done to use existing housing stock, rather than building excessively on green-field land. I agree. I want more to be done, and the Bill represents my ideas for action.
Local authorities have a vital role in helping to bring back into use empty properties that are otherwise up to standard. The best authorities already have empty homes strategies that inform and direct their efforts. In its guidance to local authorities, the Department of the Environment, Transport and the Regions encourages all of them to prepare and publish such strategies. Alas, a recent survey by the Empty Homes Agency of all 354 local authorities in England and Wales revealed that only about half of them have developed a formal strategy.
A good strategy can ensure that policies are based on reliable information about the scale of the problem and the opportunities that exist. It can raise awareness of empty homes as an issue that must be tackled. It can provide for targets and monitoring, and for liaison with housing partners and with residents. Such a strategy can bring together resources and priorities for using them. Help for owners can be made available through renovation grants, and help for people who intend to become tenants can be made available through rent deposit and rent guarantee schemes.
All authorities ought to set targets for reducing the number of empty homes in their areas. They should ensure that full and accurate information is assembled, that all their resources available for meeting the targets are identified and that the actions that will be taken are clearly defined and predictable.
As most of the empty properties are in the private sector, authorities must have comprehensive strategies. They must work with owners, letting agents and housing professionals; they need the support of the public; and they must set a good example by making sure that council


houses are fully utilised and do not stand empty in excessive numbers or for excessive periods. Of course, they must also have sufficient powers of persuasion and compulsion, which is where my Bill comes in.
Under the Bill, every local authority would be required to designate an empty homes officer who would be responsible for the work of the council in reducing the number of empty homes. The officer would be important for co-ordinating the work of the council across all departments and between it and other organisations. The officer should have full power to obtain the necessary information from all sources, including council records such as council tax data. Every local authority would be required to prepare and publish an empty homes strategy setting out local housing need and the number of empty homes; the targets for reducing the incidence of homes standing empty; the actions to be taken to reduce the number of empty homes; and how success would be measured.
My Bill would also allow local authorities to vary the council tax payable on properties standing empty, depending on local priorities. I envisage a range from 50 to 200 per cent. of the standard tax. The empty homes strategy would set out the criteria that would be applied to determine what rate would be charged. Currently, we appear to reward owners for keeping property empty. They are entitled to a 50 per cent. discount on their council tax if a property stays empty. Indeed, the Government have recently moved to end an even bigger seal of approval—nil council tax when a property awaiting major renovation work has stood empty for more than a year.
Additionally, my Bill would extend local authorities' power of compulsory purchase to allow them to acquire properties that are kept empty for unacceptable reasons or for an unreasonably long period. Again, the strategy would set out the criteria that the authority would apply in deciding when to exercise that power. I have come across situations in my Stafford constituency in which property stands empty, but the existing powers of compulsory purchase are not wide enough to allow the local authority to step in and buy the property.
We should consider the effects on neighbourhoods and on the immediate environment of properties standing empty for long periods. They become targets for vandalism and a honeypot for crime. They lower the prices of surrounding property and attract fly tipping. Those are all deeply unattractive consequences for other residents. We should consider it socially unacceptable for good homes to be allowed to stand empty, to deteriorate and to bring down standards for neighbours as well.
In introducing the Bill, I thank those who have helped and supported me. The Empty Homes Agency, which is a charity, has given me enormous support through

Ashley Horsey, its energetic chief executive and successor to the redoubtable Bob Lawrence. Similarly, the charity Shelter has helped—I should say inspired—me to keep up the pressure for housing policies that give everyone the chance of somewhere decent to live. I also thank the Law Society, which has assisted me with the drafting of my Bill, and of course my supporters, who come from all the main parties.
Will my ideas become law? I am sure that they will. Perhaps it is too late in the Session for the Bill to reach the statute book, but I have high hopes that much good will come of it. Since I proposed it, Lord Rogers has reported on the work of the urban task force. The report looks at the prospects for the Government meeting their target for 60 per cent. of new homes to be built on brown-field sites. I am delighted that all three of my main suggestions—the empty homes strategy, variable council tax and a wider power of compulsory purchase—appear in the 100 recommendations.
The task force has identified empty commercial property in addition to empty homes that could be used to provide homes for people. That raises to 1.3 million the number of homes that could be provided before we turn to new house building to meet the anticipated demand for more homes.
The Government have promised to produce a housing Green Paper later this year, which encourages me to believe that they may also produce a housing Bill. Such a Bill would, of course, be expected to deal with other important issues relating to homelessness, standards of fitness and an adequate supply of social housing; but I hope that the Government will also give careful consideration to my Bill, and to the suggestions that I have made.
Tackling the scandal of empty homes is essential for planning and for social reasons. It is also a priority that I believe would command widespread public support. Most important of all, it will help us to meet real, compelling housing needs.

Question put and agreed to.

Bill ordered to be brought in by Mr. David Kidney, Dr. Vincent Cable, Mr. David Curry, Mrs. Llin Golding, Mr. David Lepper, Mr. Andrew Love, Siobhain McDonagh, Ms Margaret Moran, Mr. Peter Pike and Mr. Jonathan Shaw.

EMPTY HOMES

Mr. David Kidney accordingly presented a Bill to make provision for reducing the incidence of vacant dwellings; to extend the duties and powers of local authorities to that end; to require local authorities to publish empty homes strategies and to exercise their duties and powers in accordance with those strategies; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 23 July, and to be printed [Bill 134].

Opposition Day

[17TH ALLOTTED DAY]

Dairy Industry

Madam Speaker: I have selected the amendment in the name of the Prime Minister.

Mr. Tim Yeo: I beg to move,
That this House notes that, since 1st May 1997, the farm gate price of milk has fallen by over a quarter, the price received by farmers for cull cows has fallen by over one third and the income of dairy farmers has collapsed; condemns the Government's failure in recent CAP negotiations to secure any immediate increase in milk quota for mainland Britain whilst conceding increases for other EU countries; deplores the delay in publishing the Monopolies and Mergers Commission report on Milk Marque, thus needlessly damaging confidence in the industry; expresses concern that outbreaks of TB have risen substantially; and urges the Government to remedy this crisis by addressing these issues, ending its disgraceful neglect of the dairy industry, strengthening Milk Marque and implementing the Krebs Report without further delay".
I welcome the presence not only of the Minister of Agriculture, Fisheries and Food but of the Secretary of State for Trade and Industry. It is rare for not just one but two members of the Cabinet to attend an agriculture debate—although both represent urban seats. [Interruption.] Who knows? Perhaps in a week or two the Government will dredge up someone with a rural seat to speak on these matters.
I shall have a word to say to the Secretary of State in a moment, but I shall start with the Minister. It is almost exactly a year since his appointment to his post, and I think even he would acknowledge that it has been a year of appalling crisis for agriculture. British farmers today face worse conditions than farmers have faced for a generation. Total income from farming has halved since Labour came to power, and the agony has been spread throughout the industry. Cereal prices have fallen by a third, livestock prices by a quarter and milk prices by well over a fifth. Collapsing prices mean collapsing incomes; they mean the destruction of family farms; they mean the loss of jobs in the countryside. There is not much of a new deal there.
Astonishingly, during this year of crisis the Government have not arranged a single agriculture debate. The only debates initiated by them in which the Minister has taken part have been on quarantine and on the Food Standards Bill. Not a moment of Government time has been used to allow Parliament to consider the plight of British farmers. The Minister may be a good listener outside, but he has not been keen to listen to Parliament. I suppose that, in that respect, he is following the example of his leader.
Although the Opposition control only a fraction of parliamentary time, this is the third occasion on which they have raised the problems of farming in a full-scale debate. Sadly, it is all too typical of Labour's attitude to the countryside that it should try to ignore this crisis completely. Labour's contempt for agriculture was exposed in its recent paper "Rural England: a discussion document", which set out the party's so-called vision for the countryside—a vision that occupied a whole page of

that rather brief publication. Labour's vision for the countryside includes not a single mention of farming or of farmers.
I think that, to be fair, we can partially exempt the Minister from these criticisms. Occasionally, I have heard him, both inside and outside the House, offering sympathy to farmers. He seems at least to have impressed the Duke of York. Perhaps that is why we read that the Prime Minister is to move the Minister on. Perhaps the Prime Minister fears that, if the Minister were to stay another year, his sympathy might even be turned into action; or his warm words might be matched by some daring deeds; or comparisons between his predecessor's extravagance and his own rather admirably frugal travel and entertainment spending may be causing embarrassment to the Cabinet enforcer.
Today, we shall focus on the dairy sector. In spring 1997, just before the general election, farm gate prices for milk were about 14p per pint. The latest farm gate prices for milk are less than 10p per pint. In the past two years, the value of Britain's milk production has fallen by more than £750 million, and the impact on dairy farmers has been devastating.

Ms Jackie Lawrence: The hon. Gentleman mentioned milk prices in spring 1997. Statistics from the Ministry of Agriculture, Fisheries and Food show that, in spring 1997, the price was 11.65p a pint; and that the current price is 9.96p a pint. That is a 10 per cent. decrease. Between July 1995 and the 1997 general election, however, the price per pint fell by a massive 24 per cent.

Mr. Yeo: Unfortunately, the hon. Lady is quoting from exactly the same sheet from the Library as I am. She has chosen—if she cares to tell the whole truth—the April 1997 figure, which was 11.65p per pint. However, at no time in the previous three years—I have the monthly figure for every month of those three years—did the price fall below 13p a pint. In January, February and March 1997, the price was 13.7p, 13.5p and 13.46p per pint. Furthermore, as I said, for the whole of the previous three years, the figure was as I have just quoted it.
If the hon. Member for Preseli Pembrokeshire (Ms Lawrence) is trying to make a point by so selectively using statistics, I am grateful to her for giving me the opportunity of proving absolutely clearly that the milk price for the whole of the latter period of the previous Government was substantially above even the level that I have quoted.

Mr. Andrew Robathan: It is true that, when the previous Government were in office, farmers complained to me—as they complained to my hon. Friend—about many things. However, the one thing that they never complained about was dairy farming, as dairy farmers did incredibly well under the previous Government.

Mr. Yeo: My hon. Friend must talk to different farmers, because I have never met a farmer of any type who does not complain about something.
The Prime Minister likes talking about hard choices. Unfortunately, when it comes to farming, the choices that Labour makes are hard not for Ministers, but for farmers. Farmers in the dairy sector are used to long hours, but they are now having to get used to small rewards.
Earlier this year, the Government had a chance to help dairy farmers. On 11 March, Agriculture Ministers completed their discussions on common agricultural policy reforms. I am sure that the Minister remembers it well—I think it was late at night. According to The Times of the next day, the Prime Minister's spokesman said that the outcome
is not satisfactory as far as we are concerned".
I think that, for once, we can all agree with him.
The deal proposed that milk quotas—which currently prevent Europe from responding to growing world demand for dairy products—should continue until 2006, and that, although Britain's milk quota should be frozen until 2003, four other countries—Greece, Spain, Ireland and Italy—should enjoy higher milk quota next year. Increased Irish milk quota damages Britain. Imports of dairy products from Ireland will rise, and thereby undermine British dairy farmers. The deal was bad enough, but when the Prime Minister discussed it with Heads of other Governments later that month, they decided that quotas should stay not until 2006 but until 2008.

Mr. Dale Campbell-Savours: May I ask the hon. Gentleman a question that requires a simple answer? Is it the position of the Conservative party that milk quotas should be completely ended?

Mr. Yeo: Yes. The position is clear. We believe that milk quotas cannot continue in the long term if we are to meet World Trade Organisation obligations and if Europe is to take advantage of increasing market opportunities for selling dairy products. Britain cannot continue to be penalised by allowing Ireland an immediate increase in milk quota next year while ours is frozen for four years.

Mr. Campbell-Savours: Will the hon. Gentleman give way?

Mr. Yeo: No. The hon. Gentleman has been noticeable by his absence from agriculture debates over the past year. He has had his chance to intervene.
The deal is bad for Britain. We have some of the best dairy-producing land in Europe, but our farmers are prevented from meeting the demand even of home consumers. In recent years, around a third of our butter and cheese requirements have been met by imports. More than 10 per cent. of dairy products are imported. Ireland, by contrast, produces four times the amount of dairy products needed to meet its home demand.
Farmers might have hoped that the Prime Minister would bat for them and for Britain when he negotiated with his European colleagues, but he has bowled them out instead. With his eyes fixed on the headlines that he wanted about Britain's budget rebate, he allowed the deal, which his own spin doctors had already rubbished, to be made even worse. That is new Labour at work. If there is a chance to help the foreign farmer, new Labour take it. If there is a chance to hit the British farmer, new Labour take it. At the very moment the Minister of Agriculture, Fisheries and Food was telling farmers that he supported them, the Prime Minister was bashing them.

Mr. Lindsay Hoyle: Following his announcement about ending milk quotas, does the hon.

Gentleman realise that removing all quota would make the milk price plummet? He would completely flood the market.

Mr. Yeo: That is not necessarily so. Farmers will be allowed to produce where there is local demand. By their nature, milk products do not travel great distances, and transport costs make it uneconomic too. It is not satisfactory that Britain, which has the potential to produce high-quality dairy products, should be forced to import them because of quotas.

Mr. Campbell-Savours: Will the hon. Gentleman give way?

Mr. Yeo: The hon. Gentleman has had his chance. He has shown more interest in agriculture today than over the whole of the previous year.
Labour's common agricultural policy reforms will mean more food imports against which British farmers cannot compete because of quotas. It is no surprise that Labour has not organised a debate about dairy farming. Previous Conservative debates have helped farmers, forcing the Government to act. On 4 November, during an earlier Conservative debate, the Minister heralded an announcement made 12 days later of an emergency aid package for farmers, worth more than £100 million. On 21 April, during our debate on the livestock sector, the Government announced that specified risk material removal charges would be postponed for a year, resulting in an extremely welcome £21 million reduction in the burden on slaughterhouses, even though the high cost of regulation continues to inflict serious damage.
Today, the Government were forced to act even before the debate had started. Yesterday, the long overdue Monopolies and Mergers Commission report on Milk Marque was published. It had been delivered to the Secretary of State for Trade and Industry on 26 February. More than 18 weeks later, the announcement of an Opposition Day debate was required before the report came out. Even the printers thought that it would come out earlier. The title page of my copy has a sticker on it, saying "July 1999"—but it is stuck over the words "June 1999". The publication of the report is welcome, but publication is not enough. So I trust that when the Minister speaks he will have more to offer.

Mr. Patrick McLoughlin: Does my hon. Friend agree that July was chosen rather than June, which may have been the Secretary of State for Trade and Industry's preferred date of publication, because it is well after the European elections; and that spin doctors who were acting in party political interests blocked No. 10 and prevented publication of the report?

Mr. Yeo: My hon. Friend makes a telling point. There is no doubt that the Government realised that the report was likely to produce a hostile reaction in many rural areas where they were afraid of doing even worse than they actually did in the recent elections.

Mr. John Bercow: Given that we have had to wait even longer for the publication of the MMC report than we customarily have to wait for the Prime Minister to provide a straight answer to a straight question—specifically, 130 days—does my hon. Friend


agree that it will be an additional source of anxiety and damage to the British dairy industry that the Secretary of State is giving the Director General of Fair Trading some six months to come up with proposals for reforming the system? Does that not threaten a substantial increase over and above the existing forecasts of the likely decline in the number of producers in the sector?

Mr. Yeo: My hon. Friend is quite right. It is intolerable that yet more uncertainty has been heaped on the sector after having to wait for so many months. It is now one and a half years since the inquiry began.
I now turn to the contents of the report, which has suffered from having spent too long addressing a fast-moving target. Milk Marque's share of the supply of milk in Britain fell from almost 50 per cent. when the MMC started considering the issue to under 40 per cent. in the current year. That huge reduction is continuing, yet the report's conclusions seem to be largely based on the 50 per cent. figure. In such a fast-moving environment, the long delay in publication has further devalued the document. Despite having wasted so much time, Labour has drawn the wrong conclusion, because the overriding need is for Milk Marque to be able to match its European counterparts and invest in processing.
Producer organisations are important in most large milk producing countries. To remain viable in the face of international competition, they need the benefit of the vertical integration which is currently denied to all farmers who have voluntarily decided to remain in the co-operative that constitutes Milk Marque. Instead of allowing Milk Marque to compete with other bodies at home and abroad, the Secretary of State has dithered. He has stopped short of absolute refusal and is saying instead, "Well, no—unless the Director General of Fair Trading decides that Milk Marque can carry out more processing," thus creating more uncertainty and more scope for bureaucratic intervention.

Mr. Eric Martlew: I remind the hon. Gentleman that I regularly take part in agricultural debates. I also know that the motion on the Order Paper was written yesterday. Given the fact that the MMC found that Milk Marque had exploited the situation, does he still believe that it should be strengthened, as proposed in the motion?

Mr. Yeo: I certainly do, as I wrote the motion myself. I am not persuaded by the allegations in the report that Milk Marque has exploited the situation. Admittedly, I have not read all 580 pages of the report, but I have studied it overnight. I do not find the evidence compelling, nor do many of the people whom I spoke to this morning. I hope that the Minister will tell us what he thinks of that and what effect it will have on dairy farmers.
While I welcome the commonsense decision of the DTI not to split up Milk Marque, which was scarcely necessary given the fact that its market share was declining so quickly, the whole thrust of the document and the Government's response to it is to put downward pressure on prices. Even farmers who are not part of Milk Marque will be astonished by the claim that its activities have kept farm gate prices artificially high. Instead of responding to

an alleged but unproven monopoly, the Government should look at why processing costs are higher here than they are in Europe.

Mr. Tim Collins: I invite my hon. Friend to ignore the comments of the hon. Member for Carlisle (Mr. Martlew). Having spoken this afternoon to members of the Cumbrian NFU, I can assure him that the hon. Gentleman does not speak for Cumbria; indeed, on the basis of the local and European election results, he will not speak for Carlisle much longer either.

Mr. Yeo: My hon. Friend makes a powerful point. The swing in the local elections was indeed startling.
The Government should examine why lower farm gate prices are not replicated on the supermarket shelf; why in some shops milk costs less than water; and why in British shops milk is often cheaper than abroad, unlike some other food items.

Mr. A. J. Beith: I want to reinforce a point that the hon. Gentleman made earlier. Is he aware of the complaint of dairy farmers in my constituency that, having been prevented from operating a vertically integrated producer co-operative, their alternative now is to sell to a company that is a subsidiary of a Danish co-operative which has 95 per cent. of its home market?

Mr. Yeo: The right hon. Gentleman is right, and the present situation will simply reinforce such absurdities.
The Government should examine the disparity between the fall in farm gate prices and the much smaller fall in supermarket prices, even if it means upsetting some of their friends, old or new, in the retail industry. Lower farm gate prices mean more dairy farmers going out of business, others working for less than the minimum wage, and more reliance on imports, which could become more expensive if the pound weakens. That would not be in the interests of farmers, consumers or retailers.
A Milk Marque free to invest in processing would improve competition; a weak Milk Marque, shackled by Government restrictions, cannot do so. Eventually, Milk Marque may no longer be able to act as the buyer of last resort.

Mr. David Drew: I agree with much that the hon. Gentleman has said about Milk Marque. Why did not the Conservative Government of whom he was a member set up a slightly different system so that many of the problems that we have to deal with did not arise?

Mr. Yeo: When Milk Marque started, it exercised a near monopoly. Because of its evolution in the past four years, we should move to the next stage and give it the commercial freedom to act as similar organisations in other European countries do, successfully and without detriment to competition.
If Milk Marque is not able to act as the buyer of last resort, some dairy farmers may find that there is no one to buy their milk. We need a small number of viable producer groups competing vigorously, and Milk Marque should be one of them. I hope that the Minister will be able to persuade his colleagues to see sense.
Dairy farmers have been damaged by the Government's failure to achieve a resumption of beef exports. Last November, the Minister triumphantly announced in the House that the beef export ban was being lifted, but eight months later not a single ounce of beef has been exported from the British mainland. The calf processing aid scheme is due to end at the end of July. Scrapping the scheme before beef exports restart is simply wrong. It will lead to huge calf surpluses and cut farmers' returns once again.
Even at this late stage, I urge the Minister to consider extending the scheme. If he really believes, as he said a couple of days ago, that beef exports will start again very soon, why not allow the scheme to run if only for another three months? Does he not recognise that not doing so means that some farmers face the prospect of rearing calves that are worthless, which itself may have animal welfare implications?
Another serious problem for dairy farmers is the growing threat from tuberculosis. Last year, there was a 45 per cent. increase in tuberculosis, but the Government have been slow to implement the Krebs report. Only two out of 10 triplet areas have so far commenced trials, which means that it will be 2004 before the trials are completed.
That go-slow on Krebs is needlessly prolonging the period before decisions are taken on how to tackle the problem. The vast majority of farmers are law-abiding and responsible, but if they see years of delay ahead before the Government make up their mind, a few may be tempted to take matters into their own hands.
Farmers are naturally concerned by recent reports that the European Commission plans to scrap school milk subsidies. The subsidy scheme allows primary schools to provide milk to millions of children across Europe. Although the response has been disappointing in other countries, the scheme has been taken up enthusiastically here.
The European Commission apparently does not regard that as a sufficient reason to continue the scheme. Will the Minister say what the current position is? I hope that he will be willing to act on the matter, as he has not been willing to do on some other European issues. Belgium's failure to inform Britain about possible contamination of Belgian dairy food products passed almost without criticism from the Minister, except for a brief reference in his statement to the House on 8 June. After his missing weekend, the Minister himself was one of the last to know.

The Minister of Agriculture, Fisheries and Food (Mr. Nick Brown): In fact, I described the matter in the House as a scandal. My remarks were widely reported in the Belgian press, so the hon. Gentleman's suggestion that it passed without comment is very wide of the mark.

Mr. Yeo: I shall be interested to see the press cuttings on a matter that the Minister says was widely reported in Belgium.
The new Food Standards Agency will not be able to do much to protect British consumers if other countries do not bother to tell us about the possible contamination of imports. If the Minister is so willing to criticise the Belgians, why has he not written a strong letter of protest to his Belgian counterpart? Can he imagine what would

have happened if the roles had been reversed? Does he not realise that a written protest might at least encourage the Belgians to contact us more promptly in future?
The issue of labelling has also featured regularly in debates about farming, and it is relevant to dairy farmers. Last month, The Daily Telegraph revealed that Sainsbury supermarkets were selling butter labelled as
pure, slightly salted English butter
when in fact it contained Belgian ingredients. That is just the latest in a long line of cases in which British consumers have been misled and British farmers penalised.
I know that the Minister acknowledges that the need for better labelling is very urgent. British consumers are too often in the dark about the true origins and contents of the food that they buy and about the methods by which it is produced. Milk quotas prevent Britain from meeting its dairy product needs. Imports will be a fact of life until the quota system is changed, so let us at least have clarity and honesty about which products are imported and which are genuinely produced at home.
Dairy farmers throughout the country will study the Minister's speech today. For some, his remarks will decide whether they remain in business. He must give the House five pledges today to reassure dairy farmers that they have a future. He should pledge that he will fight for an immediate increase in Britain's milk quota; that he will allow Milk Marque to invest in processing; that he will extend the calf processing aid scheme until beef exports resume; that he will start the remaining Krebs trials at once; finally, that labelling of dairy products will be simple, clear and honest.
Any—and preferably all—of those measures would have the Opposition's full support if they were announced today. I commend the motion to the House.

The Minister of Agriculture, Fisheries and Food (Mr. Nick Brown): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
recognises the economic difficulties faced by the dairy industry; supports the Government's efforts to reform the Common Agricultural Policy during the recent Agenda 2000 negotiations in order to move towards a freer, more competitive market; welcomes the publication of the Monopolies and Mergers Commission report on the supply of raw milk; notes its conclusions and looks forward to a new selling system being in place which meets the needs both of consumers and the dairy industry; endorses the Government's view that the industry itself must help shape its own future; and congratulates the Government for its support for industry initiatives to achieve this.
I am grateful to the hon. Member for South Suffolk (Mr. Yeo), the Opposition spokesman, for again securing Opposition time for a debate on agriculture. He is right to say that Government time has not been used for such a debate, but, whenever I ask our business managers for a debate in Government time, they tell me that a debate in Opposition time is coming up and suggest that I make my announcements then. The hon. Gentleman is also right to say that I have taken full advantage of that in the past, and the Government intend to do so again now—hence my gratitude to the hon. Gentleman.
The shadow Cabinet is clearly approaching this topic in a singled-minded way. When I looked at the motion, I thought that the speed with which the shadow Cabinet


was disowning the approach that the Conservatives adopted to these matters when they were in government was quite breathtaking. In his speech, the hon. Member for South Suffolk attempted to correct the Opposition's position, although their motion gives no hint of that.
In any event, the debate gives us two important opportunities. First, it gives the House the opportunity to debate the way forward for the United Kingdom's dairy industry, which is our largest agricultural sector. Secondly, and more specifically, it gives my right hon. Friend the Secretary of State for Trade and Industry the opportunity to deal with the questions that have been raised by the Competition Commission's report on Milk Marque, and to respond to it. The whole House will be grateful to the Secretary of State for winding up the debate on behalf of the Government and for referring specifically to that report. I will leave that aspect of the motion to him and concentrate on the other matters that the Opposition have raised.
Before I do so, the House will want to know that I have agreed to meet Milk Marque on Monday and the Dairy Industry Federation later that day. I am meeting Mr. Ben Gill, president of the National Farmers Union, immediately after the debate. I also intend to hold discussions with agriculture Ministers representing the devolved Administrations, and with other producer representatives, particularly those from dairying communities.

Mr. Robert Jackson: Before he moves on to another topic, will the Secretary of State recall his warm words to me in answer to a question about the importance of encouraging the co-operative principle in agriculture? Will he draw the attention of the Secretary of State for Trade and Industry to that important consideration, because it is absolutely fundamental to enabling Milk Marque to compete on a level playing field throughout Europe's processed dairy products market?

Mr. Brown: I strongly believe in producer co-operation. I am an advocate of it. Indeed, I echoed my remarks to the hon. Gentleman in my comments at the royal show on Monday. I said that those points would be taken into account when the Government responded to the competition report and that a statement was imminent.

Mr. Peter Luff: There is one important issue in relation to the forthcoming milk round. It is important to clarify it now, given that the Minister will not speak at the end of the debate. Will he confirm that the forthcoming milk round, in which only 36 per cent. of milk sold will pass from Milk Marque, will be unaffected by the recommendations that he announced yesterday?

Mr. Brown: The short answer is yes. The Secretary of State for Trade and Industry intends to deal specifically with that point in his winding-up speech.

Mr. Nick Ainger: I am grateful for the clear consultation on which my right hon. Friend intends to embark, literally in the next few hours and days. Once he has met the industry representatives to whom he referred to earlier, will he agree to meet a delegation from west Wales and other parts of Wales, which have the highest proportion

of Milk Marque members, who are clearly directly affected by the publication of the Monopolies and Mergers Commission report?

Mr. Brown: I am mindful of the responsibilities of the devolved Assembly and of the Minister there. Nevertheless, if my hon. Friend wishes to bring a delegation of his farmers to meet me, I shall be willing to see them. I make the offer, in as much as I reasonably can, to other hon. Members as well. Although I am willing to meet representative groups, please do not place me under siege. I accept that it is my responsibility to get the industry through. I accept the responsibility that goes with my office.

Mr. Paul Tyler: I welcome what the Minister has said. He will recognise that Cornwall does fall within his area of responsibility—we have no delegated government there yet. I can confirm that, after possibly Pembrokeshire, Cornwall has the largest number of Milk Marque suppliers.

Mr. Brown: I fully appreciate that. During my visits to Cornwall and the west country, that point was made to me over and again. I understand the anxiety. If the hon. Gentleman wishes to see me with some of his farmers—I can see what I shall be doing next week—I am willing to see them as well. This matter is important for the dairy industry because livelihoods are at stake. It is right that the Government not only set out their response to the report but help the industry to get through. I promised the dairy industry that I would work with it to get it through these difficult times, and that is exactly what I am doing.
The Opposition motion begins by referring to the fall in milk prices, the prices received for cull cows and dairy farm incomes. Of course, those are not all one issue. As we have discussed, the problem is partly cyclical and partly structural.

Mr. Christopher Gill: I am grateful to the right hon. Gentleman for giving way. Before he moves on to the generality of the points that he has outlined, may I ask him about the Monopolies and Mergers Commission report? He must realise the great significance of the report to the dairy industry, for which he is responsible. Is he mindful of the fact that, when we talk about milk, we are talking about a commodity? Does he realise how difficult it is, particularly in a modern, competitive world, to handle all the problems associated with a commodity? Having been involved in another commodity for most of my working life, I must say that it is now imperative that anyone in a commodity business is allowed to add value, otherwise, one simply cannot survive. The right hon. Gentleman must have strong words with the Secretary of State for Trade and Industry, make that point and win it.

Mr. Brown: The hon. Gentleman will have heard me say, in the general context of difficulties in the livestock sector, that one way forward is producer co-operation and co-operation to achieve added value, which means vertical integration. That issue is at the core of the problems that we are tackling. We need to see how that can be achieved in the dairy sector and be compatible with competition policy.
My right hon. Friend the Secretary of State will have more to say about that when he replies, but please do not think that I have changed my views, or that I will move


from trying to help the dairy industry get through what I acknowledge are difficult times, as I have helped other sectors—the hon. Gentleman knows about the pig sector—to what I hope will be better times, to return to profitability and to ensure that those who work so hard in agriculture get a return on their investment and hard work. That is my objective.

Miss Anne McIntosh: rose—

Mr. Brown: I will give way, but I am conscious that the Opposition were generous enough to allow a Government statement on an Opposition day, which is unusual. Obviously, it is an important statement. I will take interventions, as I know that there is much interest in the House, but I do not want to keep hon. Members out of the debate.

Miss McIntosh: I am grateful to the right hon. Gentleman. When he and my constituent, Ben Gill, meet, I am sure that the plight of dairy farmers in the Vale of York will not be far from their thoughts. Milk Marque has made a major investment in its first presence in the Vale of York. Will he ensure that that investment is secure for the foreseeable future?

Mr. Brown: That matter is better left to my right hon. Friend the Secretary of State for Trade and Industry. I want to ensure that Milk Marque gets through the competition report and that it is possible for dairy farmers to work co-operatively together, through producer organisations, so that, if they decide to do so—these are market judgments for them—they can take advantage of vertical integration. Having seen the report, I doubt whether they will be able to do so with Milk Marque entirely in its present form. I do not want to hold out hopes. However, those are matters for the Secretary of State.

Mrs. Ann Winterton: I am grateful to the right hon. Gentleman for giving way on this important issue. Further to the intervention by my hon. Friend the Member for Ludlow (Mr. Gill), is it not a fact that the industry desperately needs new investment in processing? Is not one reason for the state of processing in this country the fact that there has been no real investment? If we are to compete satisfactorily, we must have more investment.

Mr. Brown: I certainly think that adding value and, therefore, investing in processing, is an important way forward for the domestic industry. I am not pessimistic about the industry's future. Part of the problem is cyclical, and part structural. Clearly, using the opportunities of vertical integration is one way for dairy farmers to proceed. What the hon. Lady says is right.

Mr. Bercow: rose—

Mr. Brown: I will give way to the hon. Gentleman, but then I would ask Opposition Members to allow me to complete my speech, unless some matter arises out of it.

Mr. Bercow: I am grateful to the right hon. Gentleman for giving way. He will be aware that the long-term trend

had been towards a 3 per cent. reduction in the number of dairy producers, until the Lloyds TSB report in 1997, which forecast that, between 1997 and 2000, the figure would be 14 per cent. In the light of the announcement by the Secretary of State for Trade and Industry that the Director General of Fair Trading will have six months in which to produce recommendations for changed procedures, can the right hon. Gentleman confirm that he has discussed that matter with his right hon. Friend and made him aware of the possible increase in the number of producers who would go out of business in the interim?

Mr. Brown: Views are shared within government, but decisions on this matter of the competition authorities are for the Secretary of State for Trade and Industry alone. The responsibility is not shared. [Interruption.] I am afraid that that is how it works—and how it worked under the previous Government. Of course I am able to express an opinion within government, just as other Ministers can. What the hon. Gentleman says about the long-term trend is right. There is a tendency for farm businesses to amalgamate and to grow larger, and that is particularly pronounced in the dairy sector. There is nothing new about that. The economic cycle may exacerbate that trend. It is my responsibility to ensure that the Government have a policy that helps small and medium farmers get by where they can, as well as concentrating on more market-oriented business operations.
Although the hon. Member for South Suffolk rightly set out the fall in farm incomes and related it to the dairy sector, he did not make very much of the Conservative Government's deregulation of the industry and the intensive competition among processors to secure supplies of milk, which was the immediate consequence of deregulation and which, of course, forced up milk prices. Those pressures have now eased and prices have consequently weakened in the marketplace.
The motion uses the word "collapsed" in the context of dairy farmers' incomes, yet there is still a market for dairy quota. Agricultural land for dairy farming is still traded at a rate of about 2.5 per cent. of farms for sale per annum—a figure that has remained reasonably static since 1993. The size of the national dairy herd has declined only slightly in recent years. Indeed, agricultural land values are rising.
The Government monitor total agricultural bankruptcies, which peaked at about 500 in 1992 and fell back to 222 in 1998. Bankruptcy is, of course, a measure of last resort. Most farmers leaving the industry do so in an orderly way by selling up and realising their assets, including the value of milk quota. There is a steady, long-term trend in the sector towards fewer large dairy farms.

Mr. James Gray: Will the Minister give way?

Mr. Brown: The hon. Gentleman should let me finish my point; I know what he is going to come back on.
Many people envisage a future for the industry. There is a perfectly proper debate to be had about the industry's shape and structure, and the way in which the common agricultural policy and national Governments should provide continuing support to the sector, as the Government are committed to doing.

Mr. Gray: The industry and the House will be appalled by the complacent nature of the remarks that the Minister


has just made about the dairy industry. In my speech, if I am lucky enough to catch your eye Mr. Deputy Speaker, I shall expand on the poverty and hardship among dairy farmers in my constituency. In the short term, does the Minister accept that the 8p a pint that farmers in my constituency get for their milk is the lowest price since Labour was last in power in 1979? Is not that a mark of how awful the situation is in the dairy industry?

Mr. Brown: I have accepted that prices are depressed. Indeed, we explored earlier, with the hon. Member for South Suffolk, the Front-Bench spokesman, whether it was Conservative party policy to keep prices artificially high by accepting what is called the traditional European model of agriculture with quotas and tariffs, or to work towards a rational, market-oriented solution. To his credit, the hon. Gentleman endorsed the policy that the Conservative Government followed, which was to work towards a market-orientated solution.
The hon. Member for North Wiltshire (Mr. Gray) said that, because I explained that there are people who still have confidence in the industry, the Government are complacent. There is nothing complacent about expressing confidence in an industry and saying that the Government will do their best to get it through difficult times.

Mr. Gray: Farmers are going bust.

Mr. Brown: The figures that I have just quoted—I checked the point about bankruptcy—show that farm bankruptcies were at a peak in 1992, not now. That responds to his point.

Several hon. Members: rose—

Mr. Brown: I shall give way first to the right hon. Member for Bridgwater (Mr. King).

Mr. Tom King: I sympathise with the right hon. Gentleman on one problem. He is dependent on the information that reaches him. A lot of the statistics and information that he receives are out of date. In some cases, there is a considerable time lag before the effects of recent events become evident in the statistics. I have represented farmers in this House for 30 years and I have never been more deeply worried about the situation for dairy farmers. I have had the most distressing meetings in farmers' kitchens with farmers and their sons asking me about their future and whether they should stay in dairy farming or sell up now while they can, while their land, their animals and their quota still have some value. As there are no longer any regional advisory boards, I hope that the right hon. Gentleman has a more immediate finger on the pulse of the dairy industry than the statistics that reach him. The industry may be facing a more serious situation than he realises.

Mr. Brown: I accept what the right hon. Gentleman says. He makes his points sincerely and well. He is right to say that there is a lot of uncertainty in the marketplace, particularly in the dairy sector. My duty is to give as much certainty as I can about the public support regime and ensure that people are properly advised on what would be a rational business decision for their future. To say that the entire dairy sector faces ruin, which is the thrust of the Opposition motion, is wrong and goes too far. There are

difficulties, we are going through a period of restructuring and the issues have to be dealt with rationally, but it is not right to go further than that and instil fear where it is not necessary.

Mr. William Cash: I endorse the comments of my right hon. Friend the Member for Bridgwater (Mr. King). My dairy farmers in Staffordshire are deeply worried, but it is not just a local phenomenon. In the 15 years that I have represented my area, I have never seen anything as bad. Cheques are bouncing, people are in despair and young people are saying that they have no future. I am still waiting to hear something constructive from the Minister. He has given us a lot of words, but no policy. I have heard nothing in response to the charges made by my hon. Friend the Member for South Suffolk (Mr. Yeo). I have heard no answers to any of the questions asked by any of my hon. Friends. It is important that the Minister understands the urgency of the situation and the need for action.

Mr. Brown: I understand the seriousness of the situation. Farm incomes have fallen for two years running and prices are depressed. That is the core problem. I have something to say about those points, but I have also been generous in giving way. The hon. Gentleman cannot have it both ways.

Mr. David Lock: I shall be as brief as I can. I, too, have met farmers who are very concerned, but I am sure that they would be far more concerned to hear the Opposition's proposals to remove quotas and reduce prices to world levels. Does my right hon. Friend agree with paragraph 2.17 of the Monopolies and Mergers Commission report, which suggests that a cut of 30 per cent. would be needed to bring EU prices down to world levels? Would not the removal of quota and a reduction to world prices inevitably produce the collapse in prices that the Conservatives are complaining about?

Mr. Brown: What the motion says and what the hon. Member for South Suffolk has said are not quite the same. The motion refers to an immediate increase in CAP quota. I shall have something to say about that in a moment. We do not know what the world market price for milk is. The CAP supports production in the European Union. The other major suppliers also have support regimes for their products. The totally liberalised market in New Zealand cannot supply the entire world market at the competitive price that everyone says that it would. The big regimes in the United States and the European Union will continue to support the dairy industry, at considerable cost, for many years.

Mr. Andrew George: The picture that the Minister painted earlier is not reflected in my constituency. The farmers whom I have spoken to in recent weeks and months are on their knees. I should be grateful for some advice. The conditions should be right. We have the highest average dairy farm sizes in Europe, the safest milk with the highest bacterial quality in Europe and an ideal environment for low-cost fodder production, yet we have the lowest farmgate milk prices. With the best environment for a competitive dairy industry, why is confidence at an all-time low?

Mr. Brown: A range of factors is involved. The explanation is partly cyclical. People are also wondering


where the outcome of the CAP round will lead the industry in the medium term. The point about prices being lower in the United Kingdom than in the rest of the European Union is true, but it has been true since 1985.

Mr. Campbell-Savours: Will my right hon. Friend comment on the response of the hon. Member for South Suffolk (Mr. Yeo) to the intervention of my hon. Friend the Member for Carlisle (Mr. Martlew)? The hon. Member for South Suffolk made it clear that the Tories want to do away with quotas. When he was asked whether that would lead to a collapse in prices, he said that it would not, because farmers would be allowed to sell only in local markets. [HON. MEMBERS: "No he did not."] Check the record. He said that they would be allowed to sell in local markets, which implies a restriction. There is no conceivable restriction that can be used other than quotas. We have blown a hole in Conservative policy on milk pricing. I hope that the farming industry notices what the Conservatives are saying.

Mr. Brown: The Government are not contemplating issuing end-user certificates with dairy quota. As I have explained before, I believe in a reformed dairy regime within the CAP, worked out in discussions with our major trading partners to restructure our support for agriculture.

Mr. Luff: Am I right in saying that the Government—constructively and rightly—formed an alliance with other member states, including Italy and, I think, Denmark to secure the abolition of milk quotas in the most recent CAP round?

Mr. Brown: I am going to move on to that. I see that Conservative Members are so eager with excitement that they are going to sit still, not intervene and let me get to the point.
The flaw in the Conservative motion—although not in what the hon. Member for South Suffolk said to the House, which was closer to the position that the Conservatives adopted in government—is that it complains about the weakness in the domestic market and the fall in the milk prices, then goes on to demand that more dairy quota should be issued immediately in Great Britain, which would increase supply and bring prices down. The motion contradicts itself.

Mr. Yeo: indicated dissent.

Mr. Brown: If the hon. Gentleman believes that issuing extra dairy quota would somehow put prices up, I am willing to hear his explanation.

Mr. Yeo: The purpose of including that in the motion was to draw attention to the fact that, disastrously, the Prime Minister and the right hon. Gentleman agreed to Ireland getting an immediate increase in its quota, which will send more imports into this country, depressing the prices in Britain. If Britain's farmers were not shackled by the quota for another four years, they would be able to meet that demand. An increase in quota would not reduce prices; it would replace imports.

Mr. Brown: The hon. Gentleman is on to a good point. He is right to complain about the issue of extra

dairy quota, especially to Ireland. The Irish Government's case cannot really be said to have been founded in merit. In fact, it was founded on an agreement made by the Heads of Government in the early 1980s. The beneficiaries of the agreement remembered, and held the rest of us to it. I agree with the hon. Gentlemen that the agreement should not have been made, but let the House remember who made it.
Being stuck with it, I did the only thing that I could in the circumstances, and argued for an equivalent and proportionate allocation of quota for Northern Ireland. My success in achieving that unprecedented concession has been welcomed by the industry in the Province. When did any Conservative Government achieve such a thing?
The United Kingdom Government's great success in the dairy regime element of the CAP negotiations was to make a start on reform, anticipating the changes in world markets that are moving remorselessly towards the European Union's industry. I have said to the House before and I repeat it now, that I would have preferred to have gone further down the reform road and on a shorter timetable.
I believe that the radical proposal for dairy reform made by Italy, Denmark, Sweden and the United Kingdom was the right way forward for the European Union. I confidently expect us to be returning to those issues in the coming years. I attach great importance; as I told the Select Committee, to the review clause that we set for 2003 and to the work that we will put in hand leading up to that watershed.
I welcome the Finnish Agriculture Minister's intention of making the European Union's approach to the agricultural component of the upcoming World Trade Organisation round the main topic for discussion at the informal meeting of European Agriculture Ministers this September.
The reform road is a difficult one for the industry. The alternative, no matter how attractive it may seem in the short term, is to risk being overwhelmed by external market forces. To their credit, the previous Conservative Government recognised that. The Conservative party's motion today represents a significant change in position, but I accept that, during his speech, the hon. Member for South Suffolk pulled back from the worst implications of the motion. The motion implies that the industry should be placed in a straitjacket at the risk of eventually being overwhelmed by market forces.
I notice that the hon. Member for South Suffolk did not spell out what the motion means by "strengthening Milk Marque", but the implication is that it advocates the continuing exercise of unjustified monopolistic practices in the marketplace, in complete defiance of the views of the independent Director General of Fair Trading. I accept that the hon. Gentleman has not yet had an opportunity to study the report in full. I have not had that chance either, but I have the advantage of getting the executive summary from my civil servants and there are matters to which Milk Marque will have to respond.

Mr. Yeo: What I meant by "strengthening Milk Marque" was allowing it to integrate vertically, as other comparable organisations do in other European countries. That would be a strengthening of Milk Marque and that is what the Minister has said that he cannot do.

Mr. Brown: The issue is whether the competition authorities will think it right and fair for the whole of


Milk Marque, whether or not it meets the other criticisms, to become processors or whether some other adjustment will be necessary before producer co-operatives can be processors. That is the issue that we must work through with the industry in the coming weeks. I pledge to take a constructive interest in those matters and to do what I can to get the United Kingdom's dairy industry through. That is a perfectly proper thing for the Minister of Agriculture, Fisheries and Food to want to do.

Mr. Drew: I understand the spirit in which my right hon. Friend will move forward. Does he agree that the way in which Milk Marque and the industry was set up was confrontational and that the only way that we can resolve this is by putting them together around a table and negotiating our way out of this mess?

Mr. Brown: I have repeatedly told those in the food chain that there is no future for any of us in a confrontational approach. I have argued for each section of the food chain—the retailers, the processors, the food producers and even the caterers—to take a constructive interest in each other's well-being and long-term future. Those in the food chain need each other and I have done what I can to encourage co-operation.
The Krebs report is important. The previous Government invited Professor Krebs to undertake that valuable study, and I guess that only a cynic would say that they did that in order to avoid difficult decisions in the run-up to the general election.

Mrs. Angela Browning: On a point of information, I was one of the Ministers who felt that the Krebs report was important and we were only too well aware that it had been many years since there had been an independent report carried out by people who would be regarded, not just politically but in the scientific world, as having the information and qualifications necessary to produce such a report. It was nothing to do with the forthcoming general election. The report was commissioned long before the general election.

Mr. Brown: Nobody would charge either of us with cynicism, but the Conservative Government had 18 years in which to embark upon this and chose to do so in the run-up to the election.
The Krebs report is of value and I hope that it has been able to inform debate throughout the House. My predecessor had asked Professor John Bourne, a distinguished director of the Research Council Institute for Animal Health, to advise on how the report's recommendations could be implemented. I received Professor Bourne's recommendations when I became the Minister last July and decided straight away to accept his advice and press ahead with the trials. The Government are determined to see the trials through and, at the same time, to take action against tuberculosis in a number of other areas such as a combined package of research which includes the trial, vaccine development, advice on animal husbandry and cattle testing.
I want to make two points absolutely clear to the House. First, hindering or disrupting the trials is in nobody's interest. I urge everyone with an interest in this to co-operate with the trial group. The results, once evaluated, will be shared with everyone with a legitimate interest and, for the first time, we will have a scientific basis on which to proceed.
Secondly, I regard TB in dairy cattle as an animal welfare issue just as much as TB in badgers. The Government are determined to find rational solutions to the problem and not to allow TB to spread in the national dairy herd.
Let me say directly that those who are disrupting the trials are significantly narrowing the range of options available to the Government. Let me say clearly that this is not even in their own narrow sectional interests. Clearer than that I cannot be.
I am making use of this Opposition day to make an announcement. Dairy farmers have asked me whether the Government would agree to an industrywide levy to fund a generic advertising campaign. I am strongly of the view that the most important factors in this consideration are the views of dairy farmers. I can therefore announce to the House that, subject to working out the necessary details with the different parties in the dairy industry, I intend to launch a poll in early September with a closing date six weeks later.
In the United Kingdom, we have the ideal climate for milk production, the highest standards of animal welfare and product safety and some of the finest dairy products in the world.

Mr. James Paice: It is now several months since the National Farmers Union presented to the Minister a series of proposals to address the problems of TB outbreaks outside the triplet areas while the studies are taking place. When will he respond to those proposals and provide some hope for the dairy farmers outside the study areas?

Mr. Brown: I do not want to set a date. These are important matters. Significant consideration is being given to the suggestions that have put to me by the dairy industry. Clearly, the points that have been made require a response, and they will get one. I can give the hon. Gentleman the assurance that the Government will not back down from their responsibility to deal with the problem of TB in the dairy herd. If one solution will not work, we shall have to look at the remaining options.
I have been very taken with the point made in the Krebs report that the evidence of a link between TB in the dairy herd and TB in the wild badger population is compelling. That is the phrase used in the report, and that would be the starting point. I would prefer the starting point to be the results of the scientific trial, because we could then all share the evidence and use it as a basis of discussion. However, if that is to be denied me, it does not remove my responsibility to tackle the problem. I give the hon. Gentleman that clear assurance.

Mrs. Diana Organ: We are all aware of the controversy about the Krebs trial. I wholeheartedly agree that any interference with the trial only hinders the gathering of the knowledge that we need to address that dreadful disease in cattle. However, there is concern among dairy farmers in my area that the trial is slipping: Professor Krebs suggested a five-year trial, and we do not want it to become a seven or 10-year trial. We need the trial to proceed apace. My other point—

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. In view of the shortage of time available, the hon. Lady must not be greedy.

Mr. Brown: I can give my hon. Friend the assurance that she seeks. The Government are determined to push on with the trials and to do what is necessary to secure a worthwhile piece of scientific work that will inform the debate once and for all. That is the Government's preferred way forward. However, if that way forward is denied me, and it becomes impossible for us to carry out the trials, I shall still be left to deal with the problem, and I shall have to base solutions on the evidence currently available to us.
Let me draw my remarks to a close. We in this country have a high level of producer expertise and commitment, which is underpinned by strong research and development support from my Ministry.

Mr. McLoughlin: I thought that the Minister was going to make several announcements this afternoon but, so far, if I have heard him correctly, he has made one announcement about conducting in September a poll of dairy farmers that lasts for six weeks. A focus group could have sorted that out for him—is that the only announcement that he is going to make?

Mr. Brown: That is a ridiculous point. Opinions on whether or not the industry should fund a generic advertising campaign for milk should not be taken from a focus group. The people whose opinions matter are dairy farmers, which is why they are to be asked for their opinions in a poll.
Matters arising from the competition report overshadow this debate and, as I said at the start, those will be dealt with by my right hon. Friend the Secretary of State for Trade and Industry when he winds up the debate. I had formed a clear impression that the whole House accepted that report as being not only reasonable and right, but generous on the part of the Government. I do not know whether the hon. Gentleman was here at the start of the debate—

Mr. McLoughlin: indicated assent.

Mr. Brown: He is twitching on the Back Bench, but I cannot tell whether he was present or not.

Mr. Hoyle: My right hon. Friend is known for listening to farmers and the poll is welcome. However, will he also consider visiting constituencies such as Chorley to meet local farmers and so ensure that their voice is heard?

Mr. Brown: Nice try—I can see how this is going to go. I said that I would do my best to visit farmers, especially in areas where dairying is a strong sector.

Mr. Douglas Hogg: rose—

Mr. Brown: I now stand ready to respond to the invitation from my distinguished predecessor.

Mr. Hogg: Before he sits down, will the right hon. Gentleman deal with the question of cull cows? He will

know that food chain was fully insured after August 1996; that being so, is there not a real case now for announcing that the 30-month rule will not apply in respect of cattle born after August 1996? That would be reassuring to dairy farmers.

Mr. Brown: I cannot make the announcement now that the right hon. and learned Gentleman seeks, but I can give him the assurance that advice on the 30-month scheme is being prepared for me. As he knows, the matter is not entirely in my hands, but is one of several conditions set for us by the European Union. However, there is logic in his remarks: the 30-month period has now passed, so it is right to consider the future of the scheme. That matter is now under consideration and I await advice before taking it up with others. The right hon. and learned Gentleman's point is well made, but I cannot make an announcement today.
Let me now bring my remarks to a close. We in this country have a strong retailing structure and a catering industry that is now, rightly, regarded as world class. The real challenge facing the dairy industry is the increasing liberalisation of world markets and progress on common agricultural policy reform. The Government's achievement is to be regarded by our European partners as a constructive ally and to be highly valued by our partners outside the European Union for the role we play in that debate. I invite the House to vote for that approach and to reject the approach outlined in the motion tabled by the official Opposition.

Mr. Paul Tyler: As usual, I find the Minister's sympathetic tone very attractive, and I suspect that other hon. Members do as well. However, the content of his speech was bitterly disappointing. I hope that the speech of the Secretary of State for Trade and Industry at the end of the debate will be of greater substance, and that he, too, has been imbibing the milk of human kindness that was the hallmark of the Minister's speech.
Seventy per cent. of UK milk is processed by 10 companies and 90 per cent. of the butter is processed by just six companies—that is where the real cartel and the real monopoly lie. The previous Conservative Government totally failed to address that situation, although they did introduce a piece of legislation. I am sorry that the hon. Member for Workington (Mr. Campbell-Savours) is not present, because, like me, he sat through the Committee on that legislation. Neither many on the Treasury Bench nor any on the Opposition Front Bench saw that legislation all the way through its stages. I make no apology for referring to that legislation—the Agriculture Act 1993—because it forms the background to this debate.
Despite that Act, which was intended to address the problem, we still have a market that is dominated by big buyers, not big sellers. As a result, farmers' share of the retail milk price has fallen 10 per cent. since 1994—during the lifetime of Milk Marque. Farmers now receive less than lop per pint for their milk, which compares badly with consumer prices of about 25p per pint in the supermarkets and 40p per pint delivered to the doorstep. Dairy farmers have been squeezed continually over the past four or five years, and the Monopolies and Mergers Commission report does little to address that problem. It contains nothing on ways to improve the return to the average dairy farmer.
I acknowledge—and dairy farmers will welcome—the fact that the Secretary of State did not accept the recommendation to dismantle Milk Marque. However, our confusion is increased by that decision, because the logic of that huge report leads to such a recommendation, and removing that recommendation makes the logic of the report's argument extremely weak. The confusion is deepened by the Secretary of State's partial approach to the recommendations, because, having rejected the logic for dismantling, he accepts the so-called interim measures, set out on page 98, which were intended to secure the argument for dismantling Milk Marque. The Secretary of State must state at the end of the debate what structural adjustment he seeks to achieve through those interim measures; if none, they have no validity whatsoever.
The current position demonstrates the total failure of the 1993 Act to bring about a right balance between farmer, retailer and processor. During the period since the Act, the middlemen have creamed off all the profits available in the market for milk, but neither consumers nor producers have benefited proportionately.
Livestock farmers in my part of the country, to which my hon. Friend the Member for St. Ives (Mr. George) referred, are mostly small-scale producers. They are extremely vulnerable and they need effective co-operatives to survive, so I was glad to hear the Minister reiterate his support for co-operatives. However, from reading the report, let alone the Secretary of State's announcement, one would not believe that that was Government policy.
It is essential to have a successful Milk Marque if the milk sector is to survive, let alone prosper. We must be able to benefit from the EU common agricultural policy, just as farmer co-operatives do in every other member state. The report provides no endorsement of that objective.
In the current sale period, if sufficient milk is available, of course, the dairy companies will purchase about 90 per cent. of it. The remaining milk will be sold on the short-term daily or monthly market. Expressed as a proportion of the EU milk target price, United Kingdom product prices are now the lowest in the whole of the EU, and they are deteriorating. That is the background to the MMC report before us today.
The Agriculture Act 1993 was far too protective of the huge dairy companies, with their oligopolistic tendencies. Curiously, and ironically—Labour Members may find this difficult to believe—the Conservative Government were egged on by the Labour Opposition to listen to the Dairy Trade Federation, which represents some of the biggest commercial operators in the country. I am sorry that the hon. Member for Workington has left the Chamber. On Second Reading, in Committee and on Report, he kept arguing the case for restricting the freedom of manoeuvre of a producer co-operative in favour of the huge intermediaries.
In my speech on Second Reading, I said:
We want a producer-co-operative, but not as a fallback position: we want a potential ground breaker which will establish itself as a strong marketing co-operative to match those in other member states. From our experience of agriculture in other member states, we know how effective producer co-operatives are. They are

prepared to use their marketing muscle in the market place and to prevent the sort of domination of buying power which results in this country from a small number of processors and supermarkets. A co-operative with the ability to compete in the world of the giants—the supermarket chains and food processors—would be a benefit to producers and consumers. By cutting back on the bargaining power of the middle men, there is no reason why retail food prices should not fall."—[Official Report, 23 March 1993; Vol. 221, c. 828.]
In Committee, the three parties adopted sharply different attitudes to milk producers and their collective potential. I made a similar point in Committee about the importance of making Milk Marque a success not only for its sake but for the sake of the consumer. However, the hon. Member for Workington, speaking for the Labour party, wanted to restrict still more its room for manoeuvre. He said:
I only put the proposition that Parliament has the right to decide whether Milk Marque should be capped if it wants to go into processing activities. A later amendment might attempt to cap Milk Marque even if it does not want to go into processing activities.… We are not convinced that Milk Marque will not be able to abuse its position in the market place."—[Official Report, Standing Committee F, 15 April 1993; c. 12–13.]
The Labour party's emphasis was on protecting the big boys—the intermediaries in the chain—not helping the producer co-operatives, namely, the dairy farmers. I hope that now that it is in government it has seen the light.

Mr. Drew: Will the hon. Gentleman give way?

Mr. Tyler: I hope that the hon. Gentleman will take a better attitude than that of his predecessors.

Mr. Drew: To hear co-operation mentioned so many times in so short a period is music to my ears, as a Co-operative Member. However, compared to the large producer co-operatives on the continent, our dairy companies are small beer, if the hon. Gentleman will excuse my mixing metaphors.

Mr. Tyler: I endorse that view. I am grateful to have the hon. Gentleman's support and I hope that we will continue to have that support in the coming weeks and months, when the issue will be of considerable importance. That is precisely why Milk Marque should not be compared with the large co-operatives in some of the other member states, with which we compete, as my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) said.

Mr. Andrew George: Further to the point raised by the hon. Member for Stroud (Mr. Drew), does my hon. Friend agree that, under the terms of the Competition Act 1998, from March next year Milk Marque will not hold a dominant position in the market, as it will have a share of less than 40 per cent. of the liquid market. It should not be affected by the Act as it is not in a dominant and monopolistic position.

Mr. Tyler: That is true. I am grateful to my hon. Friend. Since we are relatively near neighbours, he may be reading my mind. I shall come to that point shortly. I wish to deal first with the Agriculture Act 1993.
I regret that the right hon. Member for Skipton and Ripon (Mr. Curry) is not in his place, although I had a


conversation with him yesterday on this matter. He was the Minister when the Agriculture Act went through the House. He said in Committee:
Our job as Ministers is to ensure that the arrangements which are capable of asserting that Milk Marque will not overstep the mark are able to function effectively. If that happens, the sign up rate, whether it be 17 per cent. or 70 per cent., will be less of a material consideration."—[Official Report, Standing Committee F, 15 April 1993; c. 28.]
In other words, it is not whether one has a monopoly but what one does with it that is critical.
I do not believe that the case that has been made by the MMC stands up to scrutiny. I have spent a great deal of time reading it in the past 24 hours. The definition of a monopoly in this context is not relevant and I do not believe that an abuse has been demonstrated.
Let us take a comparable situation. I understand that Express Dairies has recently announced the purchase of Glanbia's liquid milk business, giving Express a potential 30 per cent. share of the market. Will that be referred to the competition authorities? It certainly should be. Will the Minister insist that while the matter is being examined, Express Dairies is not permitted to continue recruiting farmers who produce milk and taking them away from Milk Marque?
Our experience since the Agriculture Act 1993 has been deplorable. Milk Marque now markets less than 40 per cent. of Great Britain milk production. That is much less than at the time of the report. It is likely to be as low as 36 per cent.—a point made earlier by the hon. Member for Mid-Worcestershire (Mr. Luff), the Chairman of the Select Committee—in the forthcoming selling round. The MMC did not adequately examine the traumatic events of the summer 1998 and spring 1999 selling round. It is not in the report. I have been through it and there seem to be some quick references to it, but despite the delays in publication, the MMC has not taken that into account.
As hon. Members will know, in both selling rounds, the buyers effectively held the producers to ransom. They have used their monopoly power twice in the past 12 months. The cartel was in place over those few days. The buyers were able to prevent the proper market from operating. The report is stuck in the early or mid-1990s. It has not taken into account the later 1990s. I see hon. Members on both sides of the House from agricultural constituencies agreeing that that is the case. The Secretary of State for Trade and Industry must acknowledge when he returns to the Chamber that the report is in a time warp.
The experience of those two selling rounds has convinced Milk Marque that there must be some attempt to address the full extent of the market power of the buyers, which is now held by a very small number of major dairy processing companies. Milk Marque has rightly recommended to us that the way forward must be to develop the sale of milk on more one-to-one contracts—a much more direct contractual basis—and on normal commercial terms. That would allow farmers to invest in the necessary processing capacity, and prevent milk from having to be exported, as it was in spring 1999, simply because there was insufficient manufacturing capacity in this country.
Of course it is true that the market in raw milk is naturally limited by time and transport—it is a commodity that cannot be hung about with—but it was folly for

the MMC and the Government to ignore the importance of the EU-wide milk processing market in this context. The two are linked. If there is a surplus in the raw milk market, the milk that goes for processing, which is now Europe-wide, if not worldwide—

Mr. Richard Livsey: Will my hon. Friend give way?

Mr. Tyler: I must make progress because I am conscious of the fact that the Labour and Conservative Front-Bench spokesmen took more than an hour and I want to leave time for other hon. Members to get in.
A large factor in the collapse of daily farmers' incomes has been the strength of sterling, to which proper reference has not been made today. However, that is an additional reason—I do not want to divert attention from the critical structural problems of the industry—for the Minister to come to the aid of this sector. The considerable gap that has opened between the retail prices for milk and the prices paid to producers must be addressed now; otherwise, more dairy farmers will go to the wall.
The Minister gave some figures, and it is true that there have not been as many bankruptcies—thank God—as one might have anticipated. One reason is that the amalgamations have proceeded at such a pace that there are, frankly, fewer people in the industry, so there are fewer to go bankrupt. However, I give this warning. If the indecision that is likely to follow this report for many months continues, and if there is no clear signal from both Departments that they take seriously the deterioration in the situation since the report was drawn up, there will be many more farmers whose bank managers will be dragging them into the office to say, "We know that you have hung on by your fingertips. You were waiting for the report, but frankly we see nothing in it which would give us the confidence to maintain your overdraft or borrowing requirement."
These farmers may have been able to hang on through the winter, but they will not be able to do so for much longer. As a result of the report, the likely selling price over the next few months in the selling round that is just about to start will be lower again, because of the lack of confidence in the market.
Frankly, I believe that the Secretary of State for Trade and Industry has fudged the issue of tackling the cartel behaviour of the buyers. I am sure that the Minister, who does his very best to represent the views of farmers, has done his best to influence the Department of Trade and Industry. I have to say that I wish we had been able to get to him earlier to strengthen his resolve and his arm.
In Committee, I made what I fear was an all-too-accurate forecast. I said:
The restrictions on the possible future of Milk Marque may prove to be its undoing. It will not be as effective, powerful or useful to producers as it might be."—[Official Report, Standing Committee F, 11 May 1993; c. 253.]
That is what the report has highlighted, and that is what we are debating.
I was delighted to hear the hon. Member for South Suffolk (Mr. Yeo) say on behalf of the Conservative party that he believes that Milk Marque was shackled. That is a retreat, or a U-turn, from the position of the previous


Government, but it is a recognition of the facts which I genuinely welcome. I hope that all parties will now address that issue.
I wish to make brief reference to the issue of bovine TB. As the Minister knows, my constituency is at the epicentre of one of the worst outbreaks of bovine TB, and has been for many years. It is an appallingly difficult problem with which to grapple. Having examined the issue from all sides for a long time, I believe that we are, as a result of the Krebs report, at last grasping the nettle—but what a tragedy that we have had to wait 25 years for that to happen. Successive Ministers, for political or other reasons, have left it late in the day.
We now know that the impact and the cost of TB on the industry continues to grow. Dairy herds are accounting for approximately 50 per cent. of the breakdowns. The National Farmers Union has estimated that, by 2006, the number of TB breakdowns will grow to nearly 4,000 a year. The annual cost of TB to the farms is expected to rise to almost £140 million. This is like the BSE crisis coming back and back again, without any sign of an end. I welcome what the Minister has said, and I hope that it will not be too long before we have a firm statement in relation to the representations made by the NFU on the issue, which cannot be left.
The right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg) said that some fallout from BSE remains to be dealt with, notably in relation to cull cows and the end of the calf scheme. I hope that it will not be too long before we get an answer to those questions. August is not far away and, as the Minister rightly responded to the right hon. and learned Gentleman, that is when we ought to be clear that the 30-month scheme has outlived its usefulness.
That ought to be the case—unless the Minister suggests again that maternal transmission is potentially a real problem. If it is, let him be clear about it, and let him tell farmers. That will fill them with horror.
In the meantime, the Phillips inquiry is an extremely important analysis of what went wrong. The skeletons falling from the Whitehall cupboards are fascinating, and will provide the raw material for some interesting academic studies. However, I hope also that this House can take advantage of the inquiry not only to identify what went wrong, but to ensure that the lessons are learned.
I have referred previously to the problems that those in the dairy industry—and particularly the specialist cheese makers—are having as a result of the use by the Department of Health of the sledgehammer of emergency provisions to deal with hygiene problems with cheese. I invite the Minister, if he has not done so already, to look at the judgment in the case of the Department of Health v. Aldridge. Clearly, there was a complete over-reaction by the Department of Health, which has important repercussions for specialist food producers—especially those processing milk products.

Mr. Bercow: The hon. Gentleman rightly alludes to a particularly harrowing situation. Is he aware that Mr. Aldridge has yet to receive any apology for the scandalous way in which he was treated at the hands of the Minister for Public Health?

Mr. Tyler: It would be inappropriate for me to go into great detail, but the hon. Gentleman may know that I have

twice debated this issue in the House, and we still have not had in the House an apology for the way in which Mr. Aldridge was treated. I understand that the Government are paying the legal costs of the case. That is something, but it does not compensate for the appalling loss of business suffered by Mr. Aldridge—nor for the slur on the reputation of Duckett's cheese in Somerset.
The pledges sought by the Conservatives this evening were valuable and welcome, but of far more value was the way in which the hon. Member for South Suffolk recognised the failure of the 1993 legislation on the marketing of milk. I hope that we can have all-party agreement across the House this evening that it is time to re-examine the legislation. I hope that we can have a pledge from both Front-Bench teams that they will commit themselves to a review and to reform.
Effectively, the MMC report is a confession of failure. We would not be doing our duty by the dairy farmers, the industry generally or the rural communities that depend on the industry if we did not recognise that fact and address it urgently.

Mr. Deputy Speaker: It will be painfully obvious to the House that there is a very short time left for Back-Bench speeches in what has necessarily been a truncated debate. May I make a special plea for brevity? If hon. Members could confine themselves to about five minutes apiece, it will be possible to get a reasonable spread of participants in the debate.

Mr. Mark Todd: I will do my best to be brief, Mr. Deputy Speaker. There are many dairy farmers in my constituency who are all too painfully familiar with the falling price of raw milk and the falling returns on their hard work.
Our task today, which has not been helped by the motion, is to try to help the industry to reform. I shall refer briefly to some fundamental facts and then to some of the methods we could use to address them.
First, much of the UK offers the best circumstances for milk production in the European Union. We currently produce more raw milk than we use. As in most industries, economy of scale helps—the bigger the herd, the more productive each beast is. That process has increased productivity by 22 per cent. in the past 15 years. However, this, and the decline in the volume of drinking milk consumed, has accentuated price pressures and strengthened the need for product development.
Secondly, although milk quota reform has been deferred, it remains a certainty in the medium term. Any reform should loosen the EU market and benefit the competitive suppliers that we have.
Thirdly, milk and milk products are increasingly international commodities. Currently, UK and EU prices are uncompetitive. The next World Trade Organisation round will almost certainly free the market somewhat. Although the costs of transport and the perishability of the raw product will prevent that from having much impact on drinking milk, it will have a major impact on the industry that uses milk for processing, as processors will increasingly source from global suppliers.
Fourthly, our milk processing sector is already fragmented and inefficient. Reference has been made to the monopoly nature of that sector, but the case is


not proven. Of the 10 biggest European processors, none is British. The Office of Fair Trading showed in its earlier study that a dairy processor in the UK cost 4.5p per litre to perform a task carried out in Holland for 2.6p per litre. In Denmark and Holland, vertically integrated farmers co-ops dominate the market.
We are abysmal at product development in this country. Investment has gone into processing, but it has been focused largely on the replacement of antiquated and, sadly—because of the demise of doorstep deliveries—increasingly unwanted bottle plants, not on the development of added value product.
Cheese consumption in the UK is growing. Although we consume a little less than half as much as the French, we produce only one fifth of the amount that the French industry generates. Nevertheless, the profitability of our processing sector is increasing, in marked contrast to that of farmers. This is where the point about monopoly tendencies can be argued.
Finally, the other activities of the dairy farmer have been blighted by BSE. We have discussed that, so I shall not dwell on the matter.
As part of the solution, we need first to encourage the various parts of the milk food chain to discuss together the threats and opportunities that they face. For far too long, the debate has ranged narrowly around the activities of Milk Marque and its machinations. Holstein UK, the representative body of many dairy owners in this country, suggests that
there is a need to actually progress, rather than paying mere lip service to adding value to UK milk production, by product modification, diversification and especially new product development.
Some supermarkets have already started to identify opportunities. Let us ensure that they are met by British milk products. Organic milk remains difficult to source. There are opportunities for longer-life milk products, short of UHT. We have, as I mentioned, a substantial problem in supplying our local cheese market, in which there is a trade deficit, and the same is true of yoghurts.
Secondly, we must help the chain to explore ways in which its processes can be made more efficient and abbreviated. The Minister touched briefly on the role of collective marketing. The role of the Milk Development Council should be reviewed and its brief widened to marketing, if that is what the industry wants it to do.
Thirdly, we must recognise that farmers have to be allowed up the value chain if they are to thrive. By locking Milk Marque out of processing, we may hinder that, and farmers will remain weak sellers in a concentrated market. Falling producer membership, now covering below 40 per cent. of production, as several hon. Members have noted, may anyway break the monopoly relationship to processing, but Milk Marque must recognise its customers' concerns. That is one of the telling criticisms. Traceability of product and consistency of supply are critical in the new marketplace.
Fourthly, we should review the other costs in the chain. The funding of quota purchase and leasing adds about 2.5p per litre to costs. Should we freely allow non-farming quota holders to make a return on an essentially public property? The dairy hygiene inspection charges, like our other agricultural charges, must be compared to those of

our EU competitors. We will also need to observe and support the industry's transition from the loss of the calf-processing scheme, and resolve the future of the 30-month scheme. In the medium term, reform and, in my view, eventual abolition of milk quota is essential.
Finally, we must rapidly resolve the remaining uncertainties from the Monopolies and Mergers Commission inquiry. That involves further reform of the sale procedures and precise definition of when Milk Marque will cease to be a monopoly supplier, preventing its moving into processing. We should also prepare advice on voluntary steps by Milk Marque that might allow vertical integration to proceed.
Let us look to the future of the sector, which should be a star performer in UK agriculture. Much of the work that I have outlined lies in the industry's hands, but the Government have some crucial tasks. I look forward to the Minister's response.

Mr. Patrick McLoughlin: It is no exaggeration to say that the countryside is in crisis. I agreed with much that the hon. Member for South Derbyshire (Mr. Todd) said. I shall not deal now with the points on which I disagreed with him as time is short and others want to take part in the debate.
The Minister of Agriculture, Fisheries and Food has established a reputation for going around the country, talking and listening to farmers. At the beginning of his speech today, he gave the impression that he would make some important announcement on the future of the dairy industry. Having listened to his whole speech, I was disappointed. The only thing that he promised dairy farmers was a ballot, starting in September and lasting six weeks, on whether there should be a levy for the promotion of milk. No wonder the right hon. Gentleman cannot get the Government business managers—a position that he formerly held—to allow him to make a statement of that magnitude in the House. Perhaps that is surprising, given the way that the Government treat the House of Commons.
If the Minister believes that such a levy will help the long-term future of the dairy industry, he is living in cloud cuckoo land, along with the rest of the Government. The countryside is facing a devastating crisis.
We have heard much about the Monopolies and Mergers Commission report. Yesterday the Secretary of State for Trade and Industry rejected its main conclusions but accepted other parts. As the hon. Member for North Cornwall (Mr. Tyler) said, that is not logical. In the 24 hours since the report was published, I have not managed to study it in detail but I have listened to those who have.
By announcing that he rejects the main conclusions but accepts others, the Secretary of State continues to sow doubt in the dairy industry. The problem is what will happen to dairy prices before he tells us the director general's final recommendation. The time scale on which he has so far dealt with the matter gives great cause for concern.
Let me deal more generally with the crisis in the countryside. I have the privilege to represent a good piece of the Peak district national park and some of the outstandingly beautiful areas of Derbyshire. We have such


beautiful countryside because of the way our fanners have looked after and farmed it. I have great fears for the future of the countryside if farmers do not believe that they can earn a living from their farms.
There is a notion that farmers are wealthy people. Some of them are very wealthy, but many are not. Many tenant fanners are finding it extremely difficult to sustain a living off the land. If they were subject to the national minimum wage, the Government would probably close down the farms because they would not meet the criteria.
After a 40-minute speech, the Minister proposed a ballot on a levy to take more money off the farmers. The farmers will be reluctant to see any more money come off their milk price, not because they do not want their industry to be a success but because they fear for their own survival in the long term. What they feel is not annoyance with the Government, but frustration because they can see no way out.
I respect the Minister, but I have to say that I found his speech highly complacent in respect of the position in which a lot of my constituents who are in the dairy industry find themselves—they are struggling to survive. In the Bakewell area, more than 10 have gone out of production in the past few months. Farmers cannot afford to continue producing milk at the prices that they are currently receiving.

Mr. Nick Brown: May I ask the hon. Gentleman candidly what remedy he is urging on me?

Mr. McLoughlin: Some of those that have been mentioned. From the Front Bench, my hon. Friend the Member for South Suffolk (Mr. Yeo) raised five points on which the Minister ought to act—the calf processing scheme is one of them—and my right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg) referred to the 30-month scheme, which he could address shortly. Representations on a number of points have been made to him in the debate and I hope that, because of the number of Members who want to speak, he will not mind if I do not repeat them all.
The fact that the Minister is seized of the growing concern about tuberculosis, which has spread across the north Staffordshire border well into Derbyshire, has come across in the debate. The disease is causing tremendous concern among farmers. I have seen the National Farmers Union letter forecasting the expected growth in TB, but what I have learned about its spread and growth in my constituency suggests that the NFU has probably underestimated the problem we will face. Tuberculosis is a growing problem in north Derbyshire and in various areas below Ashbourne, and it is creeping down to the constituency of the hon. Member for South Derbyshire, which is not too far away. Although I realise that it will take time to get the results of tests, we need them urgently and the Minister ought to consider establishing more trial areas so that conclusive recommendations can be made more speedily.
I want to say a lot more, but we are short of time and many Members want to speak. I say to the Minister and the Secretary of State for Trade and Industry that we have not raised these matters only because we want to discuss agriculture continually in the Chamber. We think that the Government are getting it wrong in many ways, and the future of the countryside that we love and enjoy is at

stake. It is all very well to talk about the protection of sites of special scientific interest, trying to green-up the environment and giving people the right to roam. The way the Government are going, people will have the right to roam because the fields will not be farmed and the countryside will not be in the pleasant state that we expect it to be in. I urge the Government to take action quickly.

Mr. David Lock: I am grateful for the opportunity to take part in the debate. I freely admit that I am not an agriculture expert and I have spent much of my time in the House dealing with legal reform and working with the legal profession. However, that has given me some insight and I can spot special pleading; when claims are made about the public interest, they are often based on sectional interest.
I have two substantial interests in agriculture. First, there are many farms and agriculture workers in my constituency. Wyre Forest does not contain only trees and towns; it is a beautiful rural area of Worcestershire. When I met the National Farmers Union and dairy farmers last week, they urged me to press Ministers to disclose the Monopolies and Mergers Commission report because that would be the best way to achieve confidence in the agriculture industry. I met my right hon. Friend the Secretary of State on Monday and the report was published on Tuesday, although I cannot go back to my NFU members and claim that I had any responsibility for its publication.
My second interest is that I represent about 90,000 people in all, including children. I have been worried about that throughout the debate because the vast majority of my constituents consume milk products. It is tempting to say that consumers have been totally ignored in the debate. Milk is a product; it is put on the market to be sold to consumers. I am concerned that our discussions have centred on the interests of the producers. Consumers have rights as well, the most important of which is the right to a proper, well-regulated and safe supply of milk.
Last year, I had the privilege of visiting the United States. I went to a "Save Family Farms" rally in rural Minnesota. Farmer after farmer complained that his livelihood was being ruined by the collapse of world prices. Two clear points emerged. First, a group in the United States was demanding free trade, flexibility and liberalised markets from every other country in the world, but it complained when those same principles came back to them and were inconvenient. Secondly, complaint after complaint was made against companies that were buying up land and farming at what were freely admitted to be prices with which family farms could not compete. There was opposition to structural change that was taking place in the market and causing enormous damage to family-run farms, but changes in the industry were reducing prices and putting enormous pressure on farmers. Having talked to my farmers in great depth, I wonder whether we are seeing the same sort of structural reform here. That is one reason why there is a price crisis at the moment.
The farmers in my constituency have repeatedly told me that prices are poor. They are—that has been well documented by other hon. Members so I shall not go through the figures—but my farmers also told me that the milk market is being rigged by the dairy companies and the supermarkets. The situation is not straightforward


because most of the world trade is in butter and derivative milk products rather than in milk, but paragraph 2.17 of the MMC report confirms that European Union support prices are above world prices and that a cut of 30 per cent. will be needed to bring prices here down to world levels.
Prices in Britain are substantially higher than world prices. Our consumers are paying more, although I have not heard a voice being raised on their behalf. In the years ahead, change will come through the World Trade Organisation and reform of the common agricultural policy. World prices will inevitably come down.

Mr. Gray: Irrespective of what might have happened to consumer prices recently—for all I know, people in this country may be paying the highest consumer price at the supermarket—does not the hon. Gentleman accept that farmers are demonstrably earning less than they have ever earned? Although the supermarkets and the intermediaries may be to blame for the high price to the consumer, farmers are definitely not to blame.

Mr. Lock: I entirely accept that that is right. I urge the Government to listen to the views of my hon. Friend the Member for South Derbyshire (Mr. Todd), who suggested that the way forward is to allow farmers and farmers' co-operatives to add value to their products so that they can retain more of the value that is in the raw milk. They would thus be able to get a true share of the value of what they produce.
Having looked at the MMC report in as much detail as one can overnight, it is interesting that the basic allegation of collusion between the main dairy producers and the supermarkets to keep prices down in the various bidding rounds has simply not been accepted by those who have gone into that matter in enormous detail. I find it astonishing that the report has been rubbished by a number of speakers this afternoon, given that it is doubtful whether anyone has had a chance to look at its detailed substance.

Mr. Tyler: Does the hon. Gentleman accept that work on the report ceased before the latest selling rounds, in which there was clear evidence of the cartel operations of the buyers? I see Labour Members nodding.

Mr. Lock: I obviously accept that that is correct. None the less, the report examined allegations of cartels which were made at that time and then found wanting. Those allegations may be repeated and they may be justified this time.
I want to discuss my farmers' bitter complaints about the cost of quota. Quota has been sold and leased. This is the price that farmers in my constituency are having to pay as part of the overheads involved in the production of milk. It has no benefit for the farmer, or for the consumer; it is purely a price imposed by the system chosen by the last Government in order to introduce quota.
May I make an urgent plea? I feel that, when my right hon. Friend the Secretary of State for Trade and Industry considers his response to the report and when my right hon. Friend the Minister of Agriculture considers reform of the quota system, their first priority must be to ensure that the cost goes out of the system. What the farmer

receives at the farm gate must surely be the price that he receives to meet his legitimate costs. A process that involves buying or renting quota from a retired farmer, or a middle man who may never have had anything to do with farming in the first place, is simply rigging the market and adding a cost to agriculture that benefits no one except the tiny proportion of people who have quota.
I urge my right hon. Friend the Minister to do all that he can to get rid of that cost, and to ensure that the licence to produce is there only for those who are actually producing.

Mrs. Ann Winterton: I shall try to be brief, because I know that many hon. Members wish to speak.
I believe that Cheshire farmers have been cheated this afternoon, and that the Government have pulled a fast one by announcing what almost amounts to Government business in Opposition time. In normal circumstances, we would have expected a full statement on the Government's response to the MMC report, and an opportunity to question Ministers; but the subject has been pushed into today's debate. The Government may wish to consider devoting a day's debate to this important issue in their own time. Most hon. Members have not had time to read fully and to absorb the MMC's complicated report, and they would like an opportunity to debate the issues contained in it.
Hon. Members on both sides of the House agree that the dairy industry is experiencing a crisis. Its income is lower than it has been for 60 years, and farming incomes are in free fall. Farmgate milk prices have fallen by nearly a quarter over the last two years—by more than 3p a pint. The situation is disastrous: consumers are not benefiting, but dairy processing companies—the fat cats of the industry—are profiting. The gap between the retail price, which is 25p in stores and approximately 40p for milk delivered to the doorstep, and the price paid to producers—about 10p a pint—has widened dramatically.
Dairy farmers have been disadvantaged by a particularly aggressive market. Some success has been achieved by dairy farmer co-operatives such as Milk Marque, but they face increased concentration of milk processors and retailers. Fewer than 12 major processing companies now exist in the United Kingdom, and there are only four major multiple retailers.
I believe that farmers themselves need to develop processing capacity, and to be able to make the investment that is necessary for the provision of not only world-class processing facilities, but innovation for the future. That investment is also necessary to give producers and farmers a place at the negotiating table. At present, they are excluded from the chain that takes milk from the farm to the shop. That is particularly important in the light of the decision to allocate more milk quotas from 2005 onwards, and the longer-term possibility—I put it no higher than that—of an end to the quota system. We were disappointed recently that the United Kingdom received no increase in quota. Four other countries succeeded—including Eire, which is one of our major competitors.
I am pleased that, at long last, the Secretary of State for Trade and Industry has published his response to the MMC report, and I am especially pleased that he has rejected the recommendation for Milk Marque to be


broken up. Milk Marque does not hold a dominant market position: its share of the raw milk market is only 38 per cent. in the United Kingdom, and only 4 per cent. in European Union terms. What justification is there—what justification could there possibly be—for preventing further moves into processing?
I understand that Milk Marque has been described as a complex monopoly, and that the rules that exist today were established in 1973. The MMC acknowledges that Milk Marque's current processing activities have not been used to enhance its scale monopoly. On what basis do the MMC and the Government conclude that any further advance into processing by Milk Marque would produce a different result? Perhaps the Secretary of State will tell us when he winds up the debate.
Like many others, no doubt, I want a fair deal for farmers, but let us face it: the industry has been left in limbo for many months while the MMC inquiry has been in progress. Nothing erodes confidence in the future more than uncertainty—not knowing what that future holds. Once a decision has been made for better or worse, at least people can plan. At present, however, the industry is in limbo, because the Secretary of State for Trade and Industry has kicked the ball back into touch.
Producers are willing to co-operate with processors and retailers alike, and to work together on a commercial basis to bring about the best conclusion for the United Kingdom as a whole. I hope that the Minister, the Secretary of State and others in Government will work towards that end.
I want to refer briefly to two issues that are particularly important to the fanning community in Cheshire. The first is the calf processing aid scheme, which has already been mentioned today and whose continuation I consider to be essential. The lifting of the beef export ban was announced in November last year. Since then, not one carcase has been exported to the continent, and the calf processing aid scheme will apparently cease at the end of this month. I think it vital for the scheme to continue until normal export markets have been resumed, and I hope that the Secretary of State or the Minister will give assurances in that regard.
The alternative to rearing calves that would have entered the processing aid scheme would be slaughtering them on farms—not something that any of us would contemplate with an easy mind. That in its turn would lead to a dramatic increase in on-farm burials and, potentially, to animal welfare problems.
There is another compelling reason why the calf processing aid scheme should be retained for the present. Its retention would enable farms that are subject to tuberculosis outbreaks, and therefore to herd restrictions, to prevent overstocking by removing surplus calves, thus avoiding associated animal welfare problems. That factor becomes more telling as the problem with badger tuberculosis becomes increasingly acute.
Those of us who represent dairy industries know of dairy farmers' anxiety about the spread of TB. My hon. Friend the Member for West Derbyshire (Mr. McLoughlin) said that TB was spreading into the Peak district and into his constituency; my area has also experienced outbreaks in Staffordshire and in Cheshire. The problem is growing at an alarming rate. I hope that the Government will continue to support research into the development of a cattle vaccine, and to investigate all

aspects of the origin and transmission of bovine tuberculosis. I endorse all that Opposition Front Benchers have said about that today.
All hon. Members are concerned about what is happening in rural areas. In Cheshire, we have the United Kingdom's foremost dairying county—although I accept that other areas in the United Kingdom might think that they hold that position. In my own area in Cheshire, we farm very productively and very close to large population centres, such as Stoke-on-Trent, the Potteries, the Manchester area, Liverpool and the midlands.
One of the problems facing Milk Marque is the cost of transportation, and the fact that it collects milk from every part of the United Kingdom, including south Wales and the west country. It is very easy for more local dairies to pick off local farmers, as their cost of transporting milk from Cheshire farmers to a dairy in Manchester, for example, is minimal compared with Milk Marque's costs. However, those dairies do not cover the entire United Kingdom.
I hope that more investment will be made in processing, which is a vital element for the future of our dairy sector. In the past, there has been very little such investment and, currently, the private dairy companies are making very little of it. I trust that that situation will be put right.
For all hon. Members who support rural areas, and the part that those areas play in our country—no one could have summed that up better than my hon. Friend the Member for West Derbyshire—I should simply like to say that we are concerned; we wish to see action; and we trust that the Government will, as a priority, act to address our concerns.

Mr. Alan Hurst: I am pleased to be called to speak—albeit it latterly and speedily—in this very important debate. This morning, I was speaking to a dairy farmer in my constituency, Nick Loftus, who told me of his grandfather, who had farmed a dairy farm in the Fylde, near Blackpool, in the 1920s—when, he said, similar problems existed in the dairy industry. Local dairy farmers had been threatened with a reduction in the milk price from 1¾d to 1½d per gallon. Those local farmers took it into their hands to fight the local dairy by feeding the milk to pigs or pouring it into the drains.
At that time, that method worked, and the dairy backed down. I suspect, however, that such methods would not work now, as the cartel of dairy processing companies would have milk from other locations on site within hours. Over the years, the position of producers has been weakened considerably.
I should say that one is often confused when giving examples from the dairy industry, as some people talk in litres, whereas others talk in pints. Nevertheless, Nick Loftus farms about 1,000 acres, employing five men. Those who are familiar with arable farming will realise that five men are about five times as many as one would have on a comparable-sized arable farm. His farm is in Essex, near Finchingfield, which is alleged to be the most beautiful village in Essex, if not in East Anglia. Nevertheless, although the aspect may be pleasing, the economic returns are very poor indeed.
Nick Loftus's view is quite simply that, if producers are to be strong in the market, they have to combine and to have a processing arm. Throughout history, producers have been in a weak position, but processors and retailers have been in a strong one.
Recently, we received the Monopolies and Mergers Commission's report on Milk Marque. If Milk Marque is a monopoly, it is a very poor one—as its market share has now been reduced to less than 40 per cent. I should much prefer the whole matter to be referred to a body, if there were one, called the cartel commission, so that those who are really milking the system—the producing dairy companies, and perhaps even our friends the supermarkets—might be dealt with. The retail price remains constant, but the producer price falls, and that pattern is occurring not only in the dairy sector.
Whatever faults Milk Marque might have in some aspects of its operation, it is not the key to the problem. It is very surprising to hear suggestions that it would be quite wrong for producers to have a processing arm. As we have heard in the debate, Denmark's milk co-operative has more than 90 per cent. of the Danish market, and it not only produces, but processes.
Moreover, the Danish co-operative—which is now the owner, or part owner of M and D Foods—is processing not only in Denmark, but in my own constituency. Therefore, it is vertically integrating not only in Denmark, but in the United Kingdom. Our own producers are being discouraged from vertically integrating, from adding value and—to put it into English—from going into a profitable part of the sector, so that they might be able to spread their costs and risk.
I am reassured that my right hon. Friend the Minister of Agriculture will be examining the matter further, and talking to the interested parties. However, I am sure that I am not alone when I say that we hope that producers will get a fair deal in the sector, and that profits will not simply be skimmed off and taken from producers—not to the benefit of consumers, but to the advantage of those who go between producers and consumers.

Mr. Dafydd Wigley: I should first declare an interest, as I am the president of a creamery in my constituency. However, I am an unpaid president, with no pecuniary interest in the business.
I follow the hon. Member for Braintree (Mr. Hurst) in saying that, currently, we should be concerned primarily about producers, who are going through a very difficult time. If there are no producers, there will be no consumers. I do not have to remind the House how important the dairy sector is to Wales, as it constitutes 30 per cent. of Wales's agricultural gross domestic product. In the past 20 years, the number of dairy holdings has been more than halved, from 9,000 to 4,000. Two years ago, there were 4,576 such holdings; now, there are 4,078.
Unquestionably, there is a crisis in the dairy sector. Last year, the sector's net farm income fell by 25 per cent. In the past two years—combining the dairy and livestock sectors—average annual net farm income has dropped from £18,527, to £11,524 in 1997–98, and, now, to a mere £6,854. Needless to say, some farmers must be below that average.
The average weekly net farm income is only £130. We cannot build an industry—or expect young people to go into an industry—with those figures. Something has to be done. The net margin per cow is a telling figure—from £333 in 1995–96, to £93 in 1998–99.
At the South Caernarfonshire Creamery, we are concerned that, recently, the market value of our cheddar has decreased by £500—or 20 per cent.—per tonne. The decrease is a consequence partly of imports, and partly of our inability to export because of the value of the pound, which has already been mentioned by other hon. Members. Ironically, in dealing with United Kingdom agriculture's difficulty in competing with Europe's agriculture, only the United Kingdom dairy sector is receiving no European Union agrimonetary compensation.
Plaid Cymru Members welcome the fact that, yesterday, at long last, the Monopolies and Mergers Commission report was issued. I am not sure what delayed the report, but at least we have it now. Our reaction to the report must be mixed. We welcome the fact that Ministers will not split up Milk Marque, as now is not the time to add additional uncertainty. Although there may be arguments for considering the matter in the future, we should not consider them now.
We regret very much that the report seems to favour denying Milk Marque the right to develop new processing plant, as such plant is greatly needed. A two-year scheme is about to proceed in Felinfach, investing millions of pounds and creating 70 new jobs, but it seems likely that that scheme will be undermined by the Government's decision. We should very much regret that.
A number of issues have to be addressed urgently. We all understand the problems caused by the high value of the pound—it is hitting not only the dairy sector, but others—but something has to be done about it. We also have to extend processing capacity. We therefore believe that that matter will have to be rethought by both the Secretary of State for Trade and Industry and the Minister of Agriculture, Fisheries and Food.
The calf processing scheme, which is due to end on 31 July, must clearly continue because of the difficulties that face the industry. The Government must fund the British cattle movement service beyond 30 September. We also need an urgent review of the anti-competitive impact of the supermarket chains, which is causing farmers great difficulties, but from which consumers do not appear to benefit. Now that the report has been published, I hope that action will follow.

Mrs. Angela Browning: I have two unremunerated interests to declare. I am a vice-president of Devon young farmers—[Interruption.] The Secretary of State for Trade and Industry may laugh, but there is youth in me yet. Secondly, six months ago Milk Marque put into the public domain an application for a processing plant in Cullompton, giving me a keen constituency interest in the report.
Given the report's importance and the number of questions tabled by both sides of the House, a statement from the Secretary of State would have enabled him to answer questions, and that would have been better than tagging himself on to the end of a Conservative debate on the dairy trade. I shall listen carefully to what he has to say.
We have sought to persuade the Minister of Agriculture, Fisheries and Food of the urgent situation facing the dairy trade. The Minister has a reputation for listening, and I felt that he was trying to respond to the crisis when he spoke. My right hon. Friend the Member


for Bridgwater (Mr. King) and my hon. Friend the Member for West Derbyshire (Mr. McLoughlin) testified to the devastating experiences of their constituents, and I could add to what they said. My first Trade and Industry question from the Dispatch Box flagged up the urgency of the problems facing dairy farmers, many of whom see this month's selling round as the time at which to decide whether to stay in business or call it a day.

Mr. Geoffrey Clifton-Brown: Does my hon. Friend accept that dairy farmers hanging on by their fingernails and preparing to decide during the next week or two whether to remain in business will be dismayed by the Monopolies and Mergers Commission report, which creates another six months of uncertainty over the structure of Milk Marque?

Mrs. Browning: Indeed; my hon. Friend is right. The Government's response to the report is inconsistent, and further delay faces farmers. The Secretary of State for Trade and Industry should take the opportunity provided by the debate to unlock the grip on the industry and to set some fears to rest. I hope that his response will be long on action and short on rhetoric.
Raw milk processing is a large industry, but we have been slow to change in favour of the culture of farmer co-operatives adopted in many European countries. Labour Members may think it strange that mere Conservatives should praise co-operative movements, but my advocacy is not new. My background is in marketing, and in considering how value can be added to products brought to market, I have admired examples from across the channel of farmers coming together to invest in packaging, marketing and transport in order to take a larger share of the single market. Lessons can be learned from those examples, and my hon. Friend the Member for Congleton (Mrs. Winterton) was right to say that farmers in the dairy trade are increasingly prepared to work that way.
The Minister of Agriculture said that vertical integration should be encouraged at the core of industry. I agree. Milk Marque makes a good case for wanting to process. A presentation in support of Milk Marque notes that there is no UK dairy processor in Europe's top 10, despite the UK position as the third largest milk-producing country in the EU behind France and Germany. Of the top 10 EU processors, six are farmer-controlled co-operatives. It is a tried and tested path.
The UK produces 14 billion litres of milk a year, but no UK company processes even 2 billion litres. By contrast, in Holland, a country that produces only 11 billion litres of milk a year, two companies—Friesland Coberco and Campina Melkunie—dominate the scene. Both are co-operatives, vertically integrated from farm to factory. In Denmark, the same pattern applies, with 90 per cent. of milk produced on Danish farms and processed and marketed in that way. Our sector is asking to operate on the same level playing field, and it is unbelievable that we must wait to find out whether the Secretary of State for Trade and Industry will let British farmers and companies take their product to market. If the single market is to mean anything, our farmers must have the same opportunities as others.
The Minister of Agriculture questioned our motion's desire to strengthen Milk Marque. There is nothing ambiguous in that. My hon. Friend the Member for South

Suffolk (Mr. Yeo) has pointed out, and I shall reiterate, that Milk Marque wants to process so that it can take products to market with value added. The Government's amendment says that
the industry itself must help shape its own future".
What more can it do? It has not come to the Government with a begging bowl, but is asking to be allowed to compete and to develop its product in the same way as its competitors.
The Prime Minister was questioned on that point by my right hon. Friend the Member for Fylde (Mr. Jack) this afternoon. It was extraordinary to hear him say that the contents of the report meant that allowing Milk Marque to expand and to process its own product would involve Government subsidy. The Minister will want to put his Prime Minister right, as the latter seems not to be up to speed. There is no question of Milk Marque's asking for public money.

Mr. Nick Brown: I am trying to follow the hon. Lady's argument. Is she urging the Government to reject the MMC report?

Mrs. Browning: In considering breaking up Milk Marque, the Secretary of State for Trade and Industry must consider carefully whether or not to accept the report. It is in his gift to decide. I ask him to consider Milk Marque's request on processing, which would allow it to take its place in the market.
When it comes to import substitution, value-added products will appear on supermarket shelves, which are a huge growth area for the dairy sector. If those products are not British, they will be imported products. Some may even have been produced from UK milk. Earlier this year, the Dutch bought liquid milk from the UK—there are no borders because we are in a single market—but the UK consumer and producer will find those products back on our supermarket shelves.
When new Labour came to power two years ago, Labour Members' bleepers continually told them to repeat two words at us in every speech from the Front or Back Benches—fairness and justice. Milk Marque and British dairy farmers are asking for no more than fairness and justice. They want fairness in the marketplace so that they can compete on a level playing field, and justice so that United Kingdom producers have the opportunity—it is down to them at the end of the day—to put their products on the supermarket shelf so that we do not have to buy from foreign competition.
I hope that the Secretary of State will use the opportunity to release the industry from its shackles, as it is in his gift to make sure that the industry can compete and is viable so that British dairy farmers can look to the future instead of considering whether to call it a day.

The Secretary of State for Trade and Industry (Mr. Stephen Byers): I begin by congratulating the hon. Member for Tiverton and Honiton (Mrs. Browning) on her promotion to shadow Secretary of State for Trade and Industry. I am sure that the whole House is pleased that her personal circumstances allow her to accept a well-deserved promotion and take her rightful place on the Opposition Front Bench
The MMC report is a substantial document. I welcome the opportunity of accounting to the House for my decision on the report on the supply of raw milk in Great Britain and of answering some of the questions that have been raised during this afternoon's debate.
Let me start by explaining to the hon. Lady why I did not make a statement to the House yesterday. She will be aware that when an MMC report contains commercially sensitive information, it is not the subject of a statement to the House, since the City would have notice of such a statement's being made and that might not be appropriate. That practice has been adopted by successive Governments.
The MMC report was clear. It found that Milk Marque was operating in a way that was against the public interest. In my view, that related to the conduct of its sales procedure. The MMC identified two possible remedies to address the abuse by Milk Marque of its monopoly position. It recommended an enforced break-up of Milk Marque. I rejected that recommendation. However, I accepted the view that we should address what I consider to be the key issue—the selling process that Milk Marque has operated.
It was not an easy decision, as it not usual to disagree with a clear recommendation from the MMC. It is one reason why the report took longer to publish than I would have liked; I understand the concerns expressed by many right hon. and hon. Members this afternoon and by the farming community, particularly the dairy farmers, about the delay in its publication. I wanted to publish the report as soon as possible and I have done that. I would have liked it to be sooner, but I wanted to make sure when it was published and I had put on record my decision that all avenues had been properly investigated.
When I gave evidence to the Select Committee on Trade and Industry some two and a half months ago, I said that I would ensure that the report was published by the summer recess. I am pleased to say that I have managed to do that with some two weeks to spare.
I was not prepared to accept the MMC recommendation to enforce the break-up of Milk Marque because I believed that it would lead to a period of uncertainty. That would be the last thing the dairy industry wanted after the uncertainty of recent weeks.

Mr. Hilton Dawson: I am grateful to my right hon. Friend. Although I applaud his decision not to break up Milk Marque, at least a break-up would have allowed the various companies within it to develop processing. Will he look again at the serious issue of allowing Milk Marque to carry out processing?

Mr. Byers: I shall address processing and vertical integration specifically as the issue has been raised by several right hon. and hon. Members this afternoon. The hon. Member for Congleton (Mrs. Winterton) referred to the need for diversification and vertical integration in the processing industry.
In 1992, the Conservative Government decided not to allow Dairy Crest, the processing subsidiary of the former milk marketing boards, to be transferred to Milk Marque. They decided that it would not be appropriate to allow vertical integration. Since then, vertical integration has

occurred in two areas. The MMC specifically addressed the point of whether vertical integration should take place, concluding:
Although we did not find that Milk Marque was exploiting the scale monopoly situation in respect of its current vertically integrated processing activities, we consider that the planned enlargement of its vertically integrated processing capacity will give Milk Marque the ability to exploit still further the scale monopoly situation in its favour and it may therefore be expected to operate against the public interest.
In the light of that clear recommendation, I decided that there should be no expansion of its milk marketing operations unless sanctioned by the Director General of Fair Trading.

Mr. Tyler: What level of market share can or should Milk Marque fall to before the right hon. Gentleman is prepared to review the position?

Mr. Byers: As the hon. Gentleman will be aware, the review is decided by the director general of Fair Trading. The rules were established by the previous Government. It is a matter for the director general to refer Milk Marque to the competition authorities. That power was conferred on him by the previous Conservative Administration.
I turn to the point that was raised by the hon. Member for North Cornwall (Mr. Tyler) about the difficulties that would be created by the adoption of the interim remedies that I have put in place. I was particularly aware of the difficulties caused by the report's being published at this time, just as the new selling round was about to commence. I have received strong representations, including from Mr. Ben Gill, the president of the National Farmers Union, about the difficulties that would be created if we were to implement the interim remedies immediately. I have taken the view that it would be unfair to impose them at such short notice. I therefore propose that the interim remedies recommended by the MMC should not apply to the selling round that is about to begin. However, I shall require the director general to report to me within three months of the publication of the report on the undertakings received from Milk Marque.
Several hon. Members have also raised concerns about the six-month period in which I have asked the director general to discuss with Milk Marque and other interested parties the reform of the selling process. It is not a maximum of six months. If agreement can be reached sooner rather than later, I shall be pleased to receive recommendations within the six-month period. It would be great for the industry if agreement were reached before the next selling round early next year, and if the industry and the director general made some positive proposals. I hope that Milk Marque recognises that opportunity. I look forward to the day when it proposes a selling round and a process that can be agreed by the director general, since that would make an important contribution to ensuring that Milk Marque had a strong future ahead of it.
As our amendment makes very clear, we wish to strike a balance between the interests of the dairy industry and the interests of consumers. It would have been totally irresponsible of me, as Secretary of State for Trade and Industry, and in the light of the MMC report, to ignore its findings. By rejecting the imposed break-up of Milk Marque, but by allowing further time for consultation and discussion about the selling process, I have sought to balance those—sometimes conflicting—interests.
I look forward to the time when, in partnership, we can meet the consumer's interests through a healthy and thriving dairy industry. I believe that the decisions that we have taken following the Monopolies and Mergers Commission's report will provide us with the facility to do precisely that. I urge the House to reject the motion and support the amendment.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 176, Noes 326.

Division No. 227]
[7 pm


AYES


Ainsworth, Peter (E Surrey)
Gill, Christopher


Allan, Richard
Gillan, Mrs Cheryl


Amess, David
Gorman, Mrs Teresa


Ancram, Rt Hon Michael
Gorrie, Donald


Arbuthnot, Rt Hon James
Gray, James


Atkinson, Peter (Hexham)
Green, Damian


Beggs, Roy
Greenway, John


Beith, Rt Hon A J
Grieve, Dominic


Bell, Martin (Tatton)
Gummer, Rt Hon John


Bercow, John
Hamilton, Rt Hon Sir Archie


Beresford, Sir Paul
Hammond, Philip


Blunt, Crispin
Hancock, Mike


Body, Sir Richard
Harvey, Nick


Boswell, Tim
Hawkins, Nick


Bottomley, Peter (Worthing W)
Heald, Oliver


Bottomley, Rt Hon Mrs Virginia
Heathcoat—Amory, Rt Hon David


Brake, Tom
Heseltine, Rt Hon Michael


Brand, Dr Peter
Hogg, Rt Hon Douglas


Brazier, Julian
Horam, John


Breed, Colin
Howard, Rt Hon Michael


Brooke, Rt Hon Peter
Howarth, Gerald (Aldershot)


Browning, Mrs Angela
Jack, Rt Hon Michael


Bruce, Ian (S Dorset)
Jackson, Robert (Wantage)


Burnett, John
Jenkin, Bernard


Burns, Simon
Keetch, Paul


Burstow, Paul
Key, Robert


Cable, Dr Vincent
King, Rt Hon Tom (Bridgwater)


Cash, William
Kirkbride, Miss Julie


Chope, Christopher
Kirkwood, Archy


Clappison, James
Lait, Mrs Jacqui


Clark, Dr Michael (Rayleigh)
Lansley, Andrew


Clarke, Rt Hon Kenneth (Rushcliffe)
Leigh, Edward


Collins, Tim
Letwin, Oliver


Colvin, Michael
Lewis, Dr Julian (New Forest E)


Cormack, Sir Patrick
Lidington, David


Cotter, Brian
Lilley, Rt Hon Peter


Cran, James
Livsey, Richard


Dafis, Cynog
Lloyd, Rt Hon Sir Peter (Fareham)


Davey, Edward (Kingston)
Llwyd, Elfyn


Davis, Rt Hon David (Haltemprice)
Loughton, Tim


Donaldson, Jeffrey
Luff, Peter


Dorrell, Rt Hon Stephen
MacGregor, Rt Hon John


Duncan, Alan
McIntosh, Miss Anne


Duncan Smith, Iain
MacKay, Rt Hon Andrew


Evans, Nigel
Maclennan, Rt Hon Robert


Fabricant, Michael
McLoughlin, Patrick


Fallon, Michael
Major, Rt Hon John


Fearn. Ronnie
Malins, Humfrey


Flight, Howard
Mates, Michael


Forsythe, Clifford
Maude, Rt Hon Francis


Forth, Rt Hon Eric
May, Mrs Theresa


Foster, Don (Bath)
Michie, Mrs Ray (Argyll & Bute)


Fowler, Rt Hon Sir Norman
Moore, Michael


Fox, Dr Liam
Morgan, Alasdair (Galloway)


Fraser, Christopher
Moss, Malcolm


Gale, Roger
Nicholls, Patrick


Garnier, Edward
Norman, Archie


George, Andrew (St Ives)
Oaten, Mark


Gibb, Nick
Öpik, Lembit



Page, Richard





Paice, James
Taylor, Ian (Esher & Walton)


Pickles, Eric
Taylor, Rt Hon John D (Strangford)


Prior, David
Taylor, John M (Solihull)


Randall, John
Taylor, Matthew (Truro)


Redwood, Rt Hon John
Taylor, Sir Teddy


Robathan, Andrew
Thompson, William


Robertson, Laurence (Tewk'b'ry)
Tonge, Dr Jenny


Roe, Mrs Marion (Broxbourne)
Townend, John


Ross, William (E Lond'y)
Tredinnick, David


Ruffley, David
Trend, Michael


Russell, Bob (Colchester)
Trimble, Rt Hon David


St Aubyn, Nick
Tyler, Paul


Sanders, Adrian
Tyrie, Andrew


Sayeed, Jonathan
Viggers, Peter


Shephard, Rt Hon Mrs Gillian
Wardle, Charles


Shepherd, Richard
Webb, Steve


Simpson, Keith (Mid—Norfolk)
Wells, Bowen


Smith, Sir Robert (W Ab'd'ns)
Welsh, Andrew


Smyth, Rev Martin (Belfast S)
Whittingdale, John


Soames, Nicholas
Wigley, At Hon Dafydd


Spelman, Mrs Caroline
Willis, Phil


Spicer, Sir Michael
Wilshire, David


Spring, Richard
Winterton, Mrs Ann (Congleton)


Stanley, Rt Hon Sir John
Winterton, Nicholas (Macclesfield)


Steen, Anthony
Woodward, Shaun


Streeter, Gary
Yeo, Tim


Stunell, Andrew
Young, Rt Hon Sir George


Swayne, Desmond



Syms, Robert
Tellers for the Ayes:


Tapsell, Sir Peter
Mrs. Eleanor Laing and



Mr. Geoffrey Clifton—Brown.


NOES


Abbott, Ms Diane
Campbell—Savours, Dale


Ainger, Nick
Cann, Jamie


Ainsworth, Robert (Cov'try NE)
Caplin, Ivor


Alexander, Douglas
Casale, Roger


Allen, Graham
Caton, Martin


Armstrong, Rt Hon Ms Hilary
Cawsey, Ian


Ashton, Joe
Chapman, Ben (Wirral S)


Atherton, Ms Candy
Chisholm, Malcolm


Atkins, Charlotte
Clapham, Michael


Austin, John
Clark, Rt Hon Dr David (S Shields)


Barnes, Harry
Clark, Dr Lynda (Edinburgh Pentlands)


Barron, Kevin
Clark, Paul (Gillingham)


Battle, John
Clarke, Charles (Norwich S)


Bayley, Hugh
Clarke, Rt Hon Tom (Coatbridge)


Beard, Nigel
Clarke, Tony (Northampton S)


Beckett, Rt Hon Mrs Margaret
Coaker, Vernon


Begg, Miss Anne
Coffey, Ms Ann


Bell, Stuart (Middlesbrough)
Coleman, Iain


Benn, Hilary (Leeds C)
Colman, Tony


Bennett, Andrew F
Cook, Rt Hon Robin (Livingston)


Benton, Joe
Corbett, Robin


Bermingham, Gerald
Corbyn, Jeremy


Berry, Roger
Cousins, Jim


Best, Harold
Cranston, Ross


Betts, Clive
Cryer, Mrs Ann (Keighley)


Blackman, Liz
Cryer, John (Hornchurch)


Blears, Ms Hazel
Cummings, John


Blizzard, Bob
Cunliffe, Lawrence


Blunkett, Rt Hon David
Curtis—Thomas, Mrs Claire


Boateng, Paul
Dalyell, Tam


Bradley, Peter (The Wrekin)
Davey, Valerie (Bristol W)


Bradshaw, Ben
Davies, Rt Hon Denzil (Llanelli)


Brinton, Mrs Helen
Davies, Geraint (Croydon C)


Brown, Rt Hon Nick (Newcastle E)
Davis, Terry (B'ham Hodge H)


Browne, Desmond
Dawson, Hilton


Buck, Ms Karen
Dean, Mrs Janet


Burden, Richard
Denham, John


Burgon, Colin
Dobbin, Jim


Butler, Mrs Christine
Dobson, Rt Hon Frank


Byers, Rt Hon Stephen
Donohoe, Brian H


Caborn, Rt Hon Richard
Doran, Frank


Campbell, Mrs Anne (C'bridge)
Dowd, Jim


Campbell, Ronnie (Blyth V)







Drew, David
Keeble, Ms Sally


Drown, Ms Julia
Keen, Alan (Feltham & Heston)


Eagle, Angela (Wallasey)
Keen, Ann (Brentford & Isleworth)


Eagle, Maria (L'pool Garston)
Kemp, Fraser


Edwards, Huw
Kennedy, Jane (Wavertree)


Efford, Clive
Kidney, David


Ellman, Mrs Louise
Kitfoyle, Peter


Ennis, Jeff
King, Andy (Rugby & Kenilworth)


Etherington, Bill
Kingham, Ms Tess


Field, Rt Hon Frank
Kumar, Dr Ashok


Fisher, Mark
Ladyman, Dr Stephen


Fitzpatrick, Jim
Lawrence, Ms Jackie


Fitzsimons, Lorna
Laxton, Bob


Flint, Caroline
Lepper, David


Flynn, Paul
Leslie, Christopher


Follett, Barbara
Levitt, Tom


Foster, Rt Hon Derek
Lewis, Ivan (Bury S)


Foster. Michael Jabez (Hastings)
Lewis, Terry (Worsley)


Foster, Michael J (Worcester)
Liddell, Rt Hon Mrs Helen


Fyfe, Maria
Linton, Martin


Gapes, Mike
Livingstone, Ken


Gardiner, Barry
Lock, David


Gerrard, Neil
Love, Andrew


Gibson, Dr Ian
McAllion, John


Gilroy, Mrs Linda
McAvoy, Thomas


Godman, Dr Norman A
McCabe, Steve


Godsiff, Roger
McCafferty, Ms Chris


Goggins, Paul
McCartney, Rt Hon Ian (Makerfield)


Gordon, Mrs Eileen
Macdonald, Calum


Griffiths, Jane (Reading E)
McDonnell, John


Griffiths, Win (Bridgend)
McGuire, Mrs Anne


Grocott, Bruce
Mclsaac, Shona


Grogan, John
McKenna, Mrs Rosemary


Gunnell, John
McNulty, Tony


Hain, Peter
MacShane, Denis


Hall, Patrick (Bedford)
Mactaggart, Fiona


Hamilton, Fabian (Leeds NE)
McWalter, Tony


Hanson, David
McWilliam, John


Heal, Mrs Sylvia
Mahon, Mrs Alice


Healey, John
Mandelson, Rt Hon Peter


Henderson, Ivan (Harwich)
Marsden, Gordon (Blackpool S)


Hepburn, Stephen
Marsden, Paul (Shrewsbury)


Hesford, Stephen
Marshall, David (Shettleston)


Hewitt, Ms Patricia
Marshall, Jim (Leicester S)


Hill, Keith
Marshall—Andrews, Robert


Hinchlifle, David
Martlew, Eric


Hoey, Kate
Meacher, Rt Hon Michael


Hood, Jimmy
Merron, Gillian


Hope, Phil
Michael, Rt Hon Alun


Hopkins, Kelvin
Michie, Bill (Shef'ld Heeley)


Howarth, George (Knowsley N)
Mitchell, Austin


Howells, Dr Kim
Moffatt, Laura


Hoyle, Lindsay
Moonie, Dr Lewis


Hughes, Ms Beverley (Stretford)
Moran, Ms Margaret


Hughes, Kevin (Doncaster N)
Morgan, Ms Julie (Cardiff N)


Humble, Mrs Joan
Morley, Elliot


Hurst, Alan
Morris, Ms Estelle (B'ham Yardley)


Hutton, John
Mudie, George


Iddon, Dr Brian
Mullin, Chris


Illsley, Eric
Murphy, Denis (Wansbeck)


Jackson, Ms Glenda (Hampstead)
Murphy, Jim (Eastwood)


Jackson, Helen (Hillsborough)
Naysmith, Dr Doug


Jenkins, Brian
O'Brien, Bill (Normanton)


Johnson, Alan (Hull W & Hessle)
O'Hara, Eddie


Johnson, Miss Melanie (Welwyn Hatfield)
Olner, Bill


Jones, Rt Hon Barry (Alyn)
O'Neill, Martin


Jones, Mrs Fiona (Newark)
Organ, Mrs Diana


Jones, Helen (Warrington N)
Osborne, Ms Sandra


Jones, Ms Jenny (Wolverh'ton SW)
Palmer, Dr Nick


Jones, Jon Owen (Cardiff C)
Pearson, Ian


Jones, Dr Lynne (Selly Oak)
Pendry, Tom


Jones, Marlyn (Clwyd S)
Pickthall, Colin


Jowell, Rt Hon Ms Tessa
Pike, Peter L


Kaufman, Rt Hon Gerald
Plaskitt, James



Pollard, Kerry





Pond, Chris
Stewart, Ian (Eccles)


Pope, Greg
Stinchcombe, Paul


Pound, Stephen
Stoate, Dr Howard


Powell, Sir Raymond
Straw, Rt Hon Jack


Prentice, Ms Bridget (Lewisham E)
Stringer, Graham


Prentice, Gordon (Pendle)
Stuart, Ms Gisela


Prescott, Rt Hon John
Sutcliffe, Gerry


Prosser, Gwyn
Taylor. Rt Hon Mrs Ann (Dewsbury)


Purchase, Ken
Taylor, Ms Dad (Stockton S)


Quin, Rt Hon Ms Joyce
Taylor, David (NW Leics)


Quinn, Lawrie
Thomas, Gareth (Clwyd W)


Radice, Rt Hon Giles
Thomas, Gareth R (Harrow W)


Rammell, Bill
Timms, Stephen


Raynsford, Nick
Tipping, Paddy


Reed, Andrew (Loughborough)
Todd, Mark


Reid, Rt Hon Dr John (Hamilton N)
Touhig, Don


Roche, Mrs Barbara
Trickett, Jon


Rooker, Jeff
Turner, Dennis (Wolverh'ton SE)


Rowlands, Ted
Turner, Dr Desmond (Kemptown)


Roy, Frank
Turner, Dr George (NW Norfolk)


Ruddock, Joan
Twigg, Derek (Halton)


Russell, Ms Christine (Chester)
Twigg, Stephen (Enfield)


Salter, Martin
Vaz, Keith


Sarwar, Mohammad
Vis, Dr Rudi


Savidge, Malcolm
Walley, Ms Joan


Sawford, Phil
Wareing, Robert N


Sedgemore, Brian
Watts, David


Shaw, Jonathan
White, Brian


Sheerman, Barry
Whitehead, Dr Alan


Sheldon, Rt Hon Robert
Wicks, Malcolm


Shipley, Ms Debra
Williams, Rt Hon Alan (Swansea W)


Short, Rt Hon Clare
Williams, Alan W (E Carmarthen)


Simpson, Alan (Nottingham S)
Williams, Mrs Betty (Conwy)


Singh, Marsha
Wilson, Brian


Skinner, Dennis
Winnick, David


Smith, Rt Hon Andrew (Oxford E)
Winterton, Ms Rosie (Doncaster C)


Smith, Angela (Basildon)
Wise, Audrey


Smith, Miss Geraldine (Morecambe & Lunesdale)
Wood, Mike


Smith, Jacqui (Redditch)
Woolas, Phil


Smith, Llew (Blaenau Gwent)
Worthington, Tony


Soley, Clive
Wray, James


Southworth, Ms Helen
Wright, Anthony D (Gt Yarmouth)


Spellar, John
Wright, Dr Tony (Cannock)


Squire, Ms Rachel



Starkey, Dr Phyllis
Tellers for the Noes:


Steinberg, Gerry
Mr. David Clelland and


Stevenson, George
Mr. Mike Hall.


Stewart, David (Inverness E)

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments), and agreed to.

MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,
That this House recognises the economic difficulties faced by the dairy industry; supports the Government's efforts to reform the Common Agricultural Policy during the recent Agenda 2000 negotiations in order to move towards a freer, more competitive market; welcomes the publication of the Monopolies and Mergers Commission report on the supply of raw milk; notes its conclusions and looks forward to a new selling system being in place which meets the needs both of consumers and the dairy industry; endorses the Government's view that the industry itself must help shape its own future; and congratulates the Government for its support for industry initiatives to achieve this.

Education (Choice and Diversity)

Mr. Deputy Speaker (Mr. Michael Lord): We now come to the second debate on the Opposition motions. I must advise the House that Madam Speaker has selected the amendment in the name of the Prime Minister.

Mrs. Theresa May: I beg to move,
That this House deplores the reduction in choice and diversity in education caused by the Government's abolition of grant maintained status, introduction of ballots to close grammar schools and restriction on the ability of schools to determine their own ethos; notes with concern the threat posed to school sixth forms by the Government's review of post-16 education; condemns the pursuit of uniformity at the expense of diversity; believes that the increasing bureaucratic burdens placed on schools, teachers and governors by the Government and its practice of holding back funding at the centre, to be allocated on the basis of a complicated bidding process, have a particularly adverse impact on rural schools; and further believes that these policies will damage children's education.
I welcome the opportunity to start this debate—particularly as the Government have not initiated a separate debate on education for the best part of a year—and to set out the damage that the Government are doing to education. Schools and children are suffering as a result of the increases in bureaucracy and centralisation, and of the reductions in choice and diversity. The abolition of grant-maintained status, the ballots to close grammar schools, the restrictions on schools' ability to determine their own ethos—all those policies are aimed at establishing greater uniformity and permitting less choice.
The Government make rigid policy prescriptions from the centre, for example on class sizes and on how money can be spent. That, together with increasing bureaucracy from the centre, has caused real problems for schools. Nowhere are such problems felt more keenly than in rural areas. Small rural schools are under particular threat. Reduced class sizes, and hence lower school numbers, have led to cuts in funding, while prescription by Government takes no account of the different needs of rural schools. In addition, increased bureaucracy is especially difficult for a small school with few teachers.
It is time that the Government woke up to the reality of their policies and realised that, despite their rhetoric, the reality is that education is being damaged and children are suffering.

Mr. Phil Hope: I note that the motion states that education will be damaged under the Government's policies. Will the hon. Lady comment on the record of achievement of the previous Tory Government? While that Government were in power, the number of exclusions rose, as did illiteracy levels. There were also more unqualified school leavers, and class sizes grew. Under the Tories, did not choice in education mean education for a few, and poor education for the many?

Mrs. May: I thought that the hon. Gentleman was about to give the page number from which he was quoting in his brief. I am more than happy to comment on the introduction of the national curriculum, which the Labour Government accept, as they accept standard assessment tests, Ofsted and many of the other things that the previous Government introduced.

Mr. Michael Jack: My hon. Friend referred to the difference between rhetoric and reality. Last Friday,

I visited St. Joseph's school, a small Roman Catholic school in my constituency. The headmistress told me that she had been led to understand that, under the Government's proposals for the so-called national grid for learning, the amount of money that she would receive would be properly assessed. However, the reality was that she was given a formula funding that took no account of her many hours of hard work to present her case for the school. Does that not support my hon. Friend's contention?

Mrs. May: I am grateful to my right hon. Friend for raising the issue of what happened at that school. It supports what I have said, and what I intend to say later in my speech, about the Government's lack of flexibility. The Government constantly prescribe from the centre: Whitehall, and not the schools, decides how the money will be spent.

Liz Blackman: Will the hon. Lady give way?

Mrs. May: No, I shall make progress.
Since the Government came to power in May 1997, there has been a lot of activity with regard to education, but it is a pity that so much has been destructive. The focus has been on damaging good schools and on drawing power away from local level and into the centre. That much is borne out by the example given just now by my right hon. Friend the Member for Fylde (Mr. Jack).
We should make no mistake: in the past two weeks, with regard to local authority spending and the post-16 review, the Department for Education and Employment has taken further
steps to reinforce its unenviable reputation as the most centralist Department in government",
and brought forward proposals that
represent a centralist approach, with significant powers and budgets controlled by unelected people responsible to Whitehall, not local communities.
Those are not my words, nor even the words of a Conservative Member. They are the words of Sir Jeremy Beecham, chairman of the Local Government Association and Labour's most senior councillor. [Interruption.] They are a sad comment indeed on the way in which this Government are taking power away from local level—from local education authorities, schools and parents.

Mr. Robert Jackson: Did my hon. Friend note the scornful reception that Sir Jeremy Beecham's name received among Labour Members?

Mrs. May: I thank my hon. Friend for that comment, and I agree that the reception was scornful. Sir Jeremy has given years of service to his party as a councillor. I am sure that other Labour councillors, and Sir Jeremy Beecham himself, will have noted how his views are being cast aside.
That happens all the time. The Government are not interested in the views of people who understand what is happening in schools and local authorities. They are interested only in their own rhetoric, their own press releases and their own headlines. The Government are interested more in telling parents and teachers what to do than in raising standards.
As I have said, the Government do not take any notice of what actually happens in schools. Ministers take no notice of what teachers say and have turned their back on the teaching profession. I know also the ridicule with which my next comment will be met: perhaps they should take heed of today's comment from the National Union of Teachers:
The Prime Minister and his Government are caught in the web they have spun for themselves. They cannot gain the respect of the profession through imposition.

Jacqui Smith: Does the hon. Lady still think that the literacy hour is too long?

Mrs. May: The hon. Lady will have to come up with something better than that. I suggest that she looks at the research from the university of Warwick, which suggests that the literacy hour should be split into different sessions, rather than all being in one session. I suggest that she looks at the impact of the hour on more able pupils, because it is failing them.

Fiona Mactaggart: Will the hon. Lady give way?

Mrs. May: I will take one more intervention and then make some progress.

Fiona Mactaggart: On that point and on the hon. Lady's point about how the NUT is right, did she share my concern about the NUT suggestion that the literacy hour should be an entitlement for teachers to train in, rather than an entitlement for children to learn in?

Mrs. May: One of the problems with the literacy hour is that it takes professional judgment away from teachers. We all believe in raising literacy standards, but I suggest that the hon. Lady asks some teachers in primary schools about the matter, as I do frequently. One said to me that the hour was an insult to teachers. I suggest that she thinks about that.
I shall look in more detail at the impact of Government policy in several areas. GM schools have found to their cost that all the Government's protestations, when the School Standards and Framework Act 1998 went through, that they would level up school funding so that GM schools did not lose out were just so many words. Throughout the country, former GM schools find themselves with budget cuts, forced to look at sacking teachers, increasing class sizes, stopping classes—a variety of measures are having to be taken as a result of Government policy.
I have several quotes from GM schools setting out their problems. A primary school in Derbyshire says:
The gap between government rhetoric and economic truth is breath-taking…the children in most need are the ones most threatened by these actions".
A school in Bolton says that the policy will mean an estimated 15 per cent. reduction in teaching staff. Gloucestershire primary schools say:
we would not be able to maintain the current level of teachers per class plus non-teaching head, a reduction in non-teaching staff and no time for staff to monitor teaching and the curriculum".

The Secretary of State for Education and Employment (Mr. David Blunkett): Is the hon. Lady prepared to accept that those comments from the schools were prior to my decision and announcement at the Association of Heads of Foundation and Aided Schools conference, which now incorporates GM schools? Just 10 days ago, the announcement was welcomed by Bob Lloyd, the new chair of that organisation, who said:
This is good news for all schools. We are delighted that David Blunkett has listened to the concerns. He is now taking action to ensure all schools are properly resourced".
Does that not show that, although she may been told those facts by schools before I made the announcement, she is now entirely wrong?

Mrs. May: I do not accept that I am entirely wrong because those are problems that the schools are facing today, regardless of the future extra funding that the Government have said that they might put in place. Following his statement to that conference, the word that I am hearing from GM schools is that they are very concerned about the future. They still have to face difficult decisions and budgetary problems in relation to the future of teachers and classes, despite what the Secretary of State has just said.

Mr. Phil Willis: On the same point, does the hon. Lady accept that, under the previous Administration, the vast majority of schools in Britain made those comments because, under her party's policy, additional money went to a few schools that were grant maintained, at the expense of the vast majority, which had to pay for that?

Mrs. May: That comment does not deserve a response. The hon. Gentleman knows full well that the money for GM schools in addition to the money that was given to local authority schools was spent otherwise on bureaucracy at local authority level.
Sutton Grant Maintained Schools Finance Group has written to the Secretary of State. It has pointed out that it has nearly £1 million less than is required to maintain staffing and curriculum just at last year's levels. In Liverpool, there was concern that changes in the budget
would result in larger class sizes and possible loss of smaller subjects from the curriculum, thus producing a detrimental effect on pupils' education".
In Warwickshire, GM schools have spoken about having to do some or all of the following: increase class sizes; lose a second language in key stage 3; reduce option choices at key stage 4; more teaching of second subjects by teachers and the use of non-specialists in some areas; reduction of some special needs support; post-16 reduction in schools with sixth forms; some schools having to consider redundancies this year and the next.

Miss Melanie Johnson: Will the hon. Lady give way?

Mrs. May: I will in a minute.
Whatever the Government may say about GM schools funding, the blame lies fairly and squarely at the


Secretary of State's door. I quote a letter to the Secretary of State from a head teacher of a GM school in Kent:
The fundamental working principles that are emerging from the Department, which are being cascaded down through the LEA to schools, is increasing bureaucracy, reducing delegation and restricting school management. In an attempt to curb Leas' control of funds and educational management, the Department appears to be moving towards even greater centralisation.

Mr. Edward Garnier: That is exactly the experience that two head teachers from my Leicestershire constituency recounted to me at the end of last week. Far from the Labour party policy of education, education, education producing good results, it has been translated directly into lose a teacher, lose a teacher, lose a teacher.

Mrs. May: I am grateful to my hon. and learned Friend for that intervention. He points out again to the Government the reality of their policies.

Several hon. Members: rose—

Mrs. May: I have not finished responding to the intervention.
The Government's policies mean that teachers are being made redundant, schools are increasing class sizes, and some courses are having to be stopped or taught by non-specialist teachers. The blame lies fairly and squarely at the Secretary of State's door.

Miss Johnson: rose—

Mrs. May: I apologise to the hon. Lady and give way.

Miss Johnson: Will the hon. Lady comment on the decision of the new Tory leader of Hertfordshire county council, who, at the policy committee on 1 July, told the new council that it would not be spending all the 6 per cent.—£27 million—extra that the Government will allocate to Hertfordshire next year on education, but would be cutting the increase to schools? Does she support that new Tory leader, or will she dissociate herself from those actions?

Mrs. May: The budget that was set for this year by Hertfordshire county council was the budget that was set by the Labour authority, to which the Secretary of State had to write to complain about Labour councillors' decisions.
All the GM schools that I have quoted will, I am sure, do their best for the children in their classrooms.

Valerie Davey: Will the hon. Lady give way?

Mrs. May: No. I will make some progress.
As GM schools suffer from the impact of Government policy, so that impact will ultimately fall on children in the classroom. Abolishing grant-maintained status reduces diversity.

Mr. Geoffrey Clifton-Brown: Will my hon. Friend give way?

Mrs. May: I will make a little more progress, if my hon. Friend will allow me.
Threats to grammar schools also threaten diversity, as do the actions of a number of Labour-controlled councils that have chosen to refer policies of partial selection to the adjudicator.
Earlier today in Prime Minister's Questions, the Prime Minister tried to put the blame elsewhere, but parents know that he said two years ago in the Wirral:
A Labour government will not close your grammar schools. That is my personal guarantee.
His Government introduced ballots that are rigged in favour of those who want to get rid of grammar schools. In some ballots, parents of children at the grammar school will not even have a vote. And now we hear—surprise, surprise—that Labour activists are fighting to abolish grammar schools throughout the country.
Good schools should not be closed down; they should be encouraged and, where appropriate, helped to expand. We should preserve the best and improve the rest, not abolish the best and prescribe for the rest.
What of the part played by Labour councils, which are now referring partial selection policies to adjudicators and trying to abolish even that limited selection? Once again, Labour shows that it has no interest in providing the right education for each child. That move by Government—

Several hon. Members: rose—

Mrs. May: It is a long time since I had offers from four men all at once. I think that I saw the hon. Member for South Thanet (Dr. Ladyman) rise first.

Dr. Stephen Ladyman: The theme of this debate is choice and diversity. In my constituency in Kent, there is no choice of secondary education because there is only a selective education system. There are no comprehensives within that system. If the hon. Lady believes in choice and diversity, will she join me in the campaign to introduce comprehensive education to Kent so that we have choice and diversity?

Mrs. May: I assume that that means that the hon. Gentleman will be one of the Labour activists out there fighting to abolish grammar schools in his constituency. I hope that the parents let him know exactly what they think about that.

Mr. Clifton-Brown: Is my hon. Friend aware that 90 per cent. of all my secondary schools in Gloucestershire are grant maintained? They chose to become so because they wanted to manage their own affairs. Now, they are being penalised. There will be larger class sizes and we will lose teachers because of the Government's policies. Is that not a disgrace?

Mrs. May: My hon. Friend is right, it is a disgrace and it is children who will suffer. Children's education will suffer because of the Government's dogmatic intent to get rid of grant-maintained status.

Mr. Bob Blizzard: rose—

Mrs. May: I shall make a little progress before I give way.
That move by Government to reduce choice and diversity is linked with a reduction in flexibility at local level. Lack of flexibility—for example the lack of flexibility in infant class sizes—is hitting rural schools particularly hard. That policy means, for example, that at Broomley First school in Stocksfield, Northumberland, a rota is being proposed in which three pupils from the 33-strong year 2 class will drop down to year 1, which has only 25 pupils, for three two-hour sessions a day. That migration involving nine youngsters a day would allow both classes to remain below the Government's 30-pupil target.
The director of education for Northumberland county council has said that he believes that many other schools will find themselves struggling when 30-pupil limits become mandatory in 2001. The director said:
Mr. Blair promised that all early years children would be in classes of under 30, and while that sounds great at the ballot box, it causes real difficulties in practice.
Broomley was faced with a dilemma… From 2000, all year one and two classes will have to be below 30, and what you're seeing here could be multiplied many times over because of the rigidity of the Government rules. I think the Government ought to rethink this particular policy.

Mr. Dominic Grieve: An avalanche will descend on the Government's shoulders judging by my experience with primary schools in my constituency, some of which are the best in Buckinghamshire. Parents are writing to me about that very matter. Years 1 and 2 are being mixed up to meet totally barmy criteria. Sometimes, three or four children are being moved from classes when there was no difficulty in teaching 33 or 34 children previously.

Mrs. May: My hon. Friend is right. Yet again, it is due to the fact that the Government will not allow schools to decide what is best for children at the local level. Schools that have been providing good education for their children are having to disrupt themselves and move children around in that way. Some parents are finding that their parental choice is being taken away.

Dr. Howard Stoate: May I clarify the Opposition's policy? Is she telling my constituents that it is all right for classes to be greater than 30? My head teachers tell me that the Government's policy of 30 children to a class is working and is giving more diversity and better education to their children. Is the hon. Lady saying that it is Conservative policy to increase class sizes and to have more than 30 in a class?

Mrs. May: It is important to have flexibility at local level to decide class sizes. That is the policy that we adopted during the passage of the School Standards and Framework Bill. Unfortunately, the Government have set their face against that flexibility. As a result, schools such as those in the Buckinghamshire constituency of my hon. Friend the Member for Beaconsfield (Mr. Grieve) have to turn children away, move them between classes or introduce mixed age groups when they had not had them before, all of which could disrupt children's education. That is the reality of what is happening and I suggest that the hon. Gentleman considers what is happening

throughout the country as a result of the Government's policy. It is a question not merely of disruption in the classroom, but of potential teacher losses.
Again, I am about to do something that will cause laughter on the Labour Benches because I am going to quote another teacher trade union, the Association of Teachers and Lecturers, which surveyed a number of schools in England and Wales. The results showed expected job losses of 2,051 teaching posts nationally. A member of the ATL from Sefton borough council said:
Class size reduction policy has given huge amounts to two primary schools to build extra classrooms and reduce the intake…of all other schools. The result is that the two…schools now take over 900 pupils while the rest crumble.
Again, that shows the reality of what is happening at the grassroots.
The Government may well say that it is all right because they are putting much more money in to reduce class sizes. However, it is not as easy as that. In The Times Educational Supplement last week, Mike Baker wrote an article about the problems of his local primary school. He said:
the schools where I live have a very high proportion of primary classes of 30-plus pupils. Under pressure from the Government, the council plans to reduce class sizes…If my daughter's school cuts class sizes it would be turning away even more children from a good and popular school."—[Interruption.]

Mr. Deputy Speaker: Order. We must not have these exchanges—in particular the sedentary exchanges between those on the two Front Benches.

Mrs. May: Thank you, Mr. Deputy Speaker. Mr. Baker continued:
It has no space to expand and has too many 'temporary' classrooms which have been there for decades.
The school had a policy to deal with that problem: the junior school would move into the infant school and a new infant school would be built. However, the infant school was to be built on a playing field and the Government's playing field policy came into play. So, as Mike Baker says:
you can see why this issue has become a spaghetti junction of contradictory national policies: class sizes, popular schools, playing fields".
He continues:
It is sobering to realise that as Whitehall and Westminster increase their centralising power over education, it is local education issues which most excite parents. At a time when some question the role of local authorities, it is interesting to see how it is often locally-elected councillors who feel the heat generated by conflicting national policies.
That is a view with which Sir Jeremy Beecham might, I suspect, agree.
Today, I heard of another problem resulting from the class size problem. In the village of South Marston in Wiltshire, we have a school with 96 pupils. Because of the class size pledge to reduce classes to 30 children, the school needs an extra teacher and an extra classroom. The Government have given it money for an extra teacher, but have turned down its two applications for an extra classroom. What is the point of having an extra teacher if there is nowhere for them to teach?
It is in rural areas that so many of the problems are now coming to the fore. Indeed, the Local Government Association is mounting a three-phase campaign to


highlight the difficulties encountered by rural schools, many of which are faced with closure. In March 1998, the then Minister for School Standards, the right hon. Member for Tyneside, North (Mr. Byers) announced on television that he was introducing
tough new protection for village schools".
The Government, he said,
have put in place safeguards and measures that will protect rural primary schools".
He should try telling that to the parents of children at Berkley Church of England school in Somerset, or the nine-year-old who has written to me about the closure, saying:
I was shocked and upset to hear the proposal of the closure of my school… I can't see how Somerset county council can shut down our school that has just had an excellent Ofsted and Distinction in our last Choral speaking Exam. We put on plays and concerts in St Mary's Church and each time extra seats need to be provided.
I have had a great time and Education at Berkley and all other Pupils will say the same, another thing we all agree with is that we are PROUD of our School and won't let anyone Close it.

Dr. George Turner: Before the hon. Lady continues as the new champion of rural schools, will she say something about the 500 that her party closed when it was last responsible for the governance of schools? Will she particularly say something to those in my home county of Norfolk about the 100 schools that her party closed? The £2 million that this Government are investing to reduce class sizes is helping rural schools in my environment, as is the building work that is going on. For the first time in 20 years, there is a feeling of optimism in our Norfolk villages.

Mrs. May: I suggest that the hon. Gentleman tells that to the residents of Potter Heigham, where their school is closing.
The Government simply do not understand the needs of rural areas, such as the high cost of school transport and the necessity for many parents to use their cars to take their children to school. Funding is an issue in rural areas. It is not only shire counties and shire unitary authorities that have done badly from the Government's funding settlement.

Mr. Blunkett: Just to show that we all know exactly what we are doing, perhaps the hon. Lady will tell me how many children attend Potter Heigham school, which she has used as an example of how badly we are doing?

Mrs. May: The Secretary of State will know that the impending closure of Potter Heigham school and the impact of the Government's decisions on it caused considerable concern in the village. [HON. MEMBERS: "How many?"] In fact, such concerns—

Mr. David Prior: Potter Heigham school is in my constituency. The failure of the Labour and Liberal Democrat-controlled local education authority to support that school led many parents to take their children away from it. [HON. MEMBERS: "How many?"] The school has almost closed thanks to this Government's

policies. [Laughter.] Government Back Benchers' laughter is a absolute disgrace and will horrify many parents living in Potter Heigham.

Mr. Blizzard: On a point of order, Mr. Deputy Speaker. Is it in order for hon. Members to conceal the truth from this House that Potter Heigham school has three pupils?

Mr. Deputy Speaker: That is not a point of order for the Chair; it is a matter for debate.

Mrs. May: In rural areas, funding has always been an issue, but the Government have never understood the funding problems faced in many of them. That is why the Minister for School Standards wrote to North Yorkshire county council to explain that Hull gets more funding per pupil because of social deprivation—as if rural areas have never suffered from deprivation. Rural areas face particular challenges, but they differ greatly. That is why flexibility is especially important.

Mr. Gordon Marsden: Will the hon. Lady give way?

Mrs. May: No. I have taken many interventions, so I want to continue.
Many rural schools are most frustrated at the way in which the Government are holding back funds to be spent on projects chosen from the centre, and not on those that would best suit the needs of children in such schools. Many rural schools are worried about the possible closure of school sixth forms as a result of the review that the Government are initiating, which allows for two options for funding—both of which rely on the Secretary of State telling the bodies concerned how much money to spend.

Mr. Tony McNulty: Three pupils!

Mrs. May: There are many problems in education today. Through their opposition to school freedom, local decision making and the provision of education that is right for each child, the Government are reducing choice and diversity in pursuit of uniformity. Teachers and schools are weighed down by the Government's bureaucratic burdens and the constant flow of prescription from the centre. In all of that, those who will suffer most are the children.

Mr. McNulty: Three!

Mr. Deputy Speaker: Order. I do not want again to have to call hon. Members to order for repeated seated interruptions.

Mrs. May: I think that the hon. Member for Harrow, East (Mr. McNulty) was marking his own interventions.
I want schools to be set free, teachers to be allowed to get on with teaching, parents to be able to choose for their children and children to be helped and encouraged to develop their full potential. I object to the Government's policies not just because they restrict schools, prescribe to teachers and reduce parents' choice, but because they


damage children's education. I encourage all hon. Members who are interested in children's education to vote with me in support of the motion.

The Secretary of State for Education and Employment (Mr. David Blunkett): I genuinely wanted to be able to congratulate the hon. Member for Maidenhead (Mrs. May) on her first speech from the Front Bench as shadow Secretary of State. I thought that she was doing fine until she mentioned Sir Jeremy Beecham. At that point, she misunderstood an "Ooh-ah Cantona" as an attack on Sir Jeremy rather than an echo of Opposition Members' applause for him. We all agree that local government is critical and that we should ensure maximum flexibility locally, but I want to make one or two things clear before I respond to the hon. Lady's speech.
If local authorities like Tory-controlled Buckinghamshire or Northumberland cannot manage to operate our class size pledge without causing the disruption that the hon. Lady has described, we will do it for them. If they are not capable of managing it, they should let us know. The task of coming up with the plans, with the schools, has been devolved to them. It is decentralist. It is not bureaucratic; it is not being run from Sanctuary buildings. It is being run in conjunction with schools and authorities.
Secondly, if Opposition Members are to give the hon. Lady information and she is to use it in this House, she should for God's sake ensure that she has done her homework on it. If she uses an example of a school in north Norfolk in which there are only three pupils—[HON. MEMBERS: "That is not the point."] It is exactly the point; this debate is on diversity and choice. Who has made the choice of which school their children attend in north Norfolk? The parents have made that choice.

Mr. Prior: It was the choice of the LEA to close that school. Following that decision, it was not surprising that parents chose to send their children elsewhere.

Mr. Blunkett: But why was the decision made to close the school? [Interruption.] I am hearing interesting heckling, but I am addressing my remarks to the hon. Gentleman. Why was the decision taken? Was it because the school was succeeding and parents were flooding it with their children, or because the school was struggling and had received a particularly unfortunate Ofsted report and parents had ceased to support it by sending their children there? That is the essence of the debate about diversity and choice. If we want choice and diversity to be in the hands of parents, they should be able to take the decisions to back that up, including having a vote on whether they want a selective system for children aged 11.
None of that comes as a surprise. The hon. Member for Maidenhead is very charming. I do not mind saying that because her husband is here tonight and I want to protect her from the slur that she has made against herself by saying that it was a long time since four men at once were after her. I wondered when the previous time had been. Last year, in her previous Front-Bench Opposition job, she said famously that we had inherited a golden legacy. I have thought about that a lot since. The Conservatives'

golden legacy started with early years. They refused initially to accept that nursery provision was necessary for anyone but the better-off, who could pay for it. When they changed their view and reverted to the commitment made by Baroness Thatcher in the early 1970s to expand nursery education, they decided to do it through the voucher scheme.
What was the impact of the voucher scheme? It started to create market chaos in which providers were put out of business, particularly in Norfolk. The previous Secretary of State, the right hon. Member for South-West Norfolk (Mrs. Shephard), would never accept that she was damaging her county by undermining choice where diversity did not exist. Expanding to ensure a nursery place for all four-year-olds and putting in place admissions policies for infants which ensure that children cannot be denied a place because they had not gone to the nursery school attached to that infants school has increased choice and diversity.

Mr. Michael Fabricant: Does the right hon. Gentleman accept that in rural areas such as Staffordshire, which has small villages without local schools, the voucher system enabled nursery groups to be set up? With the abolition of the voucher system, those groups have had to close, resulting in the children either being unable to go to nursery schools in neighbouring larger towns or being shipped in by parents at great cost?

Mr. Blunkett: But 900 playgroups closed in the last year of the Conservative regime. We have intervened to put an extra £500,000 in, expanding the amount of money available to the Pre-School Learning Alliance. Whatever the attacks on the Government, we shall continue to support that diversity. As we double the number of nursery places for three-year-olds over the next three years, we shall create even more places in rural as well as urban areas.
The golden legacy on class sizes left 500,000 youngsters aged five to seven in classes of more than 30. We are taking the positive action that parents have demanded.

Mrs. May: The Secretary of State talks about the figures for closures of pre-school playgroups. Will he accept the figures produced by the Pre-School Learning Alliance that over the past two years 1,500 pre-schools have closed and there is an expectation that 1,700 will close over the next year?

Mr. Blunkett: I do not accept those figures, because we have to consider those that are opening as well as those that are closing. We have to take into account the resources that have been put in, the opportunities that have been gained and the working party that has been established to ensure that we provide diversity. We can give a clear role to the Pre-School Learning Alliance and other bodies in providing for younger children as well as for four-year-olds. That is linked to our child care strategy. We are linking nursery with other playgroup activity and providing an opportunity for parents to make the decision.
In the end, parents will choose. That is what the debate is about. If they have a choice between a pre-school group and a nursery and they choose the nursery, who am I to intervene? I ask rhetorically, of course, because we are all


in favour of diversity and choice. We are in favour of it for those 500,000 youngsters who, through no fault of their own, found themselves in classes of more than 30 at a crucial moment in their education when class size makes a difference. We know that it does because everybody tells us—Ofsted tells us, research tells us, those who buy in the private sector tell us—so we are doing something about it by expanding the number of places in popular schools. We have already added 12,000 places. By September we shall have removed 300,000 of the 500,000 youngsters from over-sized classes in infants schools. That is a good record that I am proud of. If there are hiccups, we shall help the schools and the county councils to sort them out with extra facilities and extra teachers.
What about choice and diversity and the golden legacy of the two out of every five children who could not read, write and add up at the age of 11 when we came to office? What about our terrible imposition of a literacy hour and a numeracy hour? Yes, a full hour. Some 90 per cent. of heads have said that it is working and they welcome it. On Monday, when I went to Wesley Green school on the Blackbird Leys estate in Oxford, I found that the teachers were over the moon, the pupils were enthusiastic and the school had doubled the number of children reaching level 4 in literacy this year and trebled the number of children reaching level 4 in numeracy having piloted the numeracy programme. That is real choice and diversity that offers proper standards rather than rubbish for some and excellence for others.

Mr. Christopher Fraser: Does the right hon. Gentleman accept the criticism that has been levelled against the Government by schools in my constituency that every hour of the literacy hour requires at least three or four hours of preparation by the teacher? That takes them away from being in the classroom.

Mr. Blunkett: That would be a shame if it were true, but the literacy framework and the materials provided with it have given a structure and the back-up to help all teachers, including newly qualified teachers. I meet NQTs all the time and they say that it is a phenomenal change and a real improvement. Linked to a new induction from September, it will make an enormous difference to them. They do not have to reinvent the wheel, but simply have to use what works best across the board.

Dr. Stoate: When I visited Knockall school in my constituency, I found those there delighted by the literacy hour. I took part in it with the children and the teachers. They were even more delighted about piloting the numeracy hour. I was astounded by the numeracy of the children in year 5. I was at Fleetdown school this morning, which was also doing extremely well in the literacy hour. Those schools are examples of success in delivering excellent education to children.

Mr. Blunkett: Quite right. I am sure that the chief inspector of schools would not mind my referring to his comments this morning on Radio 4, when he said that the literacy and numeracy hours were not an imposition and were not bureaucracy, but were clearly working in the interests of children.

Mr. Willis: And the chief inspector is always right.

Mr. Blunkett: I am being heckled, but just for once I shall not rise to the bait.
What about the golden legacy of no basic curriculum for teacher training, no new deal for schools, none of the investment that we are making in transforming the environment for schools and no learning grid?
I was interested to learn tonight that there have been grumbles from St. Joseph's primary school about the way in which the learning grid resources are being allocated. I thought that we were supposed to rely on the diversity of local government to arrange that allocation with schools. I thought that we were being chided for being too centralist and for running everything from Sanctuary buildings, and we are told that we should let county councils and schools run everything. However, on every scheme that we are not running from Sanctuary buildings, we are chided for what is happening at local level, which is the fault of the county council.
Here is another conundrum: every time we have formula funding, we are criticised, as we were criticised tonight in respect of St. Joseph's, and when we do not have formula funding, we are criticised for making the funding too specific. What do the Opposition want? Do they want formula funding, or do they want funding to be specifically provided to schools? Do they want the local authority or the Department of the Environment, Transport and the Regions to determine that funding? Do they want a literacy hour and a numeracy hour, or would they like to leave two out of five children languishing without a decent education, as they were before?

Dr. Julian Lewis: I have a positive suggestion to make, and I want to know whether the Secretary of State will subscribe to it. Given, as he rightly says, that the key problem is that by the time children move on, at age 11, to secondary school, too much damage has been done by insufficient levels of literacy and numeracy, does he accept that it would be in everybody's interest if national performance tables were published, showing the results of the tests at age seven, so that one could find out which schools were succeeding and which were failing? Would it not be helpful also if the tables contained a register of how much cash was being spent per pupil at each school and the average class size at each school? We would not then be having these debates in a vacuum; we would have solid data and people would know what was working and what was not.

Mr. Blunkett: I thought that we were being criticised for taking too much time and spending too much money on measures that are not directly related to teaching in the classroom. We are criticised for collecting too much information, for asking too much of schools and teachers and for giving them too many forms to fill in, so that too much information is coming out of Sanctuary buildings. We have been so hurt by that criticism that I have asked the Under-Secretary, my hon. Friend the Member for Norwich, South (Mr. Clarke), to spend a great deal of his time unravelling that process and making sure that we do not place greater demands on schools. The Conservatives sent out 80 separate documents when they organised the national curriculum, but we have reduced that to one document.
We are doing our utmost to respond to the needs of teachers and schools. I am hurt by the terrible fact that whatever we do, we cannot get it right. The only consolation is that we are turning things round and making a difference. We are changing what is happening


in schools and motivating decent teachers and lifting their morale. We are ensuring that schools are building their confidence. They will have the resources to do that over the next three years. They are having their buildings repaired. They are getting a learning grid that never existed under the Tories.
This August, there will be 1,200 summer schools that never existed under the previous Government. There is a new excellence in cities programme. There is a new pay and performance programme with £1 billion of extra resources to pay teachers. There is a new admissions code that tries to unravel the shambles that we inherited which has bedevilled the delivery of education at a local level and undermined choice and diversity for parents.

Mr. Andrew George: I seek the Secretary of State's advice and guidance on an area of the legacy to which he is referring. There is a lack of choice in rural areas, such as my constituency in west Cornwall, because as a result of the Rotherham judgment, of which the Secretary of State will be aware, parents can no longer choose to send their children to the school in whose catchment area they live. What action will the Department take to ensure that parents do not have to bus their children to the nearest market town instead of the local school that they want their children to attend? That has been the result of that judgment and previous Tory policy. Will the right hon. Gentleman continue to follow that Tory policy?

Mr. Blunkett: I am grateful to the hon. Gentleman for reminding me that in the admissions code and the regulations that have been published, which take effect from this autumn, we are establishing local admissions forums and providing an independent appeals process for parents. We shall ensure that there is adjudication over school reorganisation and that parents living near the school can exercise their preference, which they must do at the beginning of the process. That process will be open and transparent, and we are building in new information requirements for parents. All that will help enormously.
In the end, parents can only state a sensible preference and have any semblance of choice if we raise the standard of education in schools across the board. People will then make preferences based not on the fact that some schools provide an awful education—in which case supply and demand are out of kilter—but on the diversity to which Conservative Members have referred. If we raise the standard of all schools, choice will be made according to the ethos of the school, not the standard of education on offer. While demand for and supply of schools is not in equilibrium, we are letting down parents and children. Some parents will get their child into a school at the expense of someone else's child.
What we heard from the Conservatives earlier was tragic because it was all about the few, rather than the many. It was all about what had happened to a small number of children. I have made it clear that we value children, teachers and parents, wherever they are and whatever their status. It is no good the hon. Member for Maidenhead or her colleagues going over old ground. They can refight the 1997 election on grant-maintained schools and selection as often as they like, but it is a dead agenda. It has been dead from 1 May 1997. The GM

schools have moved on and so have the parents. We have all moved on to ensure that we raise the level of funding in all schools to the level that GM schools had, not the other way round. Those schools respect and accept that, and I am proud that we have managed to reach an accord with them.
In the end, all that matters is that children get a decent education. It does not matter whether we fall out here tonight or whether we knock spots off each other. We shall be judged on whether we have made a difference.

Mr. Crispin Blunt: The right hon. Gentleman will need no lessons about the fact that secondary school heads are extremely busy people with onerous responsibilities. Twenty of them came from Surrey to lobby their MPs, and they included heads of grant-maintained schools who are struggling with the change and have experienced a cut in resources per pupil. However, that is not the point that I want to make.
All those heads agreed that the difficulty that they face is in controlling and getting access to resources so that they can decide how to allocate them in their schools. They said that the complicated bidding process, in which they must bid for money for all the different little schemes, is an enormous bureaucratic burden. Will the right hon. Gentleman undertake to allow the Under-Secretary, who is examining that process, to consider how funding is allocated to schools and to free up the secondary school heads in Surrey and elsewhere so that they can use the resources as they and their governors see fit?

Mr. Blunkett: I am going to surprise the hon. Gentleman by saying yes. I am very keen to ensure that we consider sensible suggestions about how to deal with genuine problems. Surrey received an extra £21 million, which is an increase of 6.3 per cent. We need to make sure that the money reaches schools. That is why I published the tables two weeks ago. We need to make sure that there is an additional delegation of at least 5 per cent. per pupil from next April. We need to examine how the standards fund and other resources reach schools, and make sure that they do so in the least bureaucratic fashion possible. Surprise, surprise—I am prepared to listen and to take action in the interests of children.
We are in favour of diversity and we are in favour of choice. In the end, those will only be possible because of the resources and changes that we have introduced.
We are determined to pursue our policies because they are working. More failing schools are coming out of special measures than are going in, and they are doing so in a shorter period of time. We are delivering excellence by spreading it between beacon schools, from where it spreads out into the community. We are already doubling and will double again the number of specialist schools, and placing them under an obligation to share that specialism with the community and with other schools.
We are proud of what we are doing and we are going to carry on doing it. We shall continue to ensure that we put pupils and their parents at the heart of this debate. That debate cannot be about going backwards or arguing about the divisions of the past: in the end, it is the standards of the future that matter.

Mr. Don Foster: First, I welcome and congratulate the new Opposition Front-Bench team. I also welcome the Secretary of State's thoughtful speech, although he was somewhat generous in his comments on the speech made by the hon. Member for Maidenhead (Mrs. May). He was absolutely right to say that most of her speech and most of the Opposition motion was concerned with going over old ground. Wordsworth put it slightly differently, writing of:
old unhappy far-off things, and battles long ago.
I have to tell the hon. Lady that she was fighting battles of long ago and touting an ideology that has been seen to fail and has let down the children of this country for a long time.

Mr. Desmond Swayne: Will the hon. Gentleman give way?

Mr. Foster: If the hon. Gentleman is about to defend that old policy, I shall be delighted to hear from him.

Mr. Swayne: Does the hon. Gentleman accept that, however old the battles may be, they are being fought because Members of Parliament such as myself are continually and constantly approached in our constituencies by head teachers expressing precisely the problems to which we are drawing attention?

Mr. Foster: I am most grateful to the hon. Gentleman for his intervention and I am sure that the House looks forward to hearing a thoughtful speech in which he tells us of the many head teachers who want to go back to how things were under the previous Administration. I shall be extremely surprised if he can seriously tell me that there are many teachers who want to return to a system that was designed to ensure nice schools for nice kids and the scrap heap for the vast majority. If he points out that there are some head teachers who are not entirely happy with everything that the Government are doing, that will not surprise me at all—indeed, I intend to express some of my concerns about Government policy. However, it would be foolish to deny that the new Government have introduced several measures that have brought about real and positive improvements in our education system.
The Liberal Democrats welcome the scrapping of nursery vouchers and the assisted places scheme, both of which added to bureaucracy and, as the Secretary of State is wont to say, gave something to the few but not the many. We welcome the recent White Paper on post-16 education: we believe that the vast majority of measures outlined therein will result in a real improvement in education for that age group. We especially welcome the statement made today by the Under-Secretary of State for Education and Employment, the hon. Member for Norwich, South (Mr. Clarke), about ways of providing additional support to children from disadvantaged areas. If the hon. Member for New Forest, West (Mr. Swayne) believes that measures such as those are not popular with head teachers, he must have been talking to an extremely select sample of head teachers.
However, in a debate such as this, it is important to draw attention to those areas of Government policy that cause us concern because they lead to a reduction in choice or in diversity. The Secretary of State has referred

to the literacy hour and the numeracy hour. I was not entirely happy with the introduction of the literacy hour and I am still not satisfied on that subject. It is absolutely right for the Government to provide through their website and by other means support, advice and worked examples to teachers. However, to impose on teachers a specific way in which literacy must be taught detracts from the professional autonomy of our teachers in carrying out a task for which they have been trained. Nevertheless, I am delighted that the numeracy hour has been introduced in a way that appears to acknowledge that the literacy hour was overly prescriptive—it is important that such lessons are learned.
I hope that the Secretary of State accepts that our schools are denied choice if they are denied the funding to carry out their work. He has suggested that a lot more money is getting through to schools, but the reality on the ground is that schools are not getting that extra money—it is almost as if the cheque is still in the post. He might want to claim that that is the fault of local education authorities, as he tried to do in respect of the league tables that were published a few days ago—[Interruption.] The Secretary of State says from a sedentary position that I have said it for him.
The Secretary of State would be wrong to make such an accusation. There are two reasons, the first of which is that, according to the Audit Commission—whose figures I hope the right hon. Gentleman accepts—the amount of money per pupil being made available to our schools has gone down by an average of £50 since the Labour Government entered office. The additional money is not coming through. We know that education spending as a percentage of gross domestic product has declined in the first two years of the Labour Government. We also know that the share of total Government spending on education has decreased. Without sufficient money, one's choices are restricted, but by all three counts education spending has gone down, so schools' choices are increasingly restricted.
Even if I am right about the reduction in money in the first two years of the Labour Government, it should be noted that the Secretary of State said today—and it is precisely stated in the Government amendment—that there is to be an increase in funds of £19 billion. That figure is incorrect. That assertion is based not on my analysis of the Government's statement, but on the report produced by the Labour-dominated Select Committee on the Treasury.
The Government are suggesting that £16 billion of the £19 billion will come to England; but the Committee says that the true figure for the real-terms increase is only £8 billion, and that that £8 billion does not represent a significant increase on the previous Government's education spending projections. The Committee's analysis goes further and shows that it is possible that, with that £8 billion, education spending will reach 5 per cent. of GDP by 2002. That was the percentage of GDP spent on education under the previous Administration, so that is no improvement. Of course I am grateful on behalf of my constituents and those of many other hon. Members for the fact that some increase in funding is promised, but it is wrong of the Government to try to pretend that the sum is greater than it is.
This debate is not only about the school-based education system. We must recognise that the reduction in spending has been experienced in other parts of the


education service. It is interesting to note that, based on the Government's own figures and despite their introducing a fees system, current projections indicate that the amount of money per student in higher education is also set to fall during the first term of the Labour Government.
I am concerned that the Government are possibly denying choice in our schools in several other areas. The first relates to something of which the Secretary of State is in part rightly proud. I and my party have supported the Government's moves to try to reduce class sizes in key stage 1, but we are genuinely concerned that class sizes in other key stages are rising. They are rising in key stage 2, and in our secondary schools the averages are now at an all-time high for the past 20 years. We hope that when extolling the virtues of reduced class sizes, the Government will bear it in mind that they must start to move as rapidly as possible to put a stop to the increase in other parts of the education sector.
Another area in which the Government are denying choice relates to their target-setting agenda. It is appropriate for the Government to set targets for themselves, for individual schools, for LEAs and even for what happens in individual classrooms, but I am sure that the Secretary of State and Ministers are concerned about what the previous Prime Minister described as the long tail of underachievement. We must do something about children from less-well-off backgrounds with poorer educational provision. As I have said in the Chamber before, it is of real concern to me that no targets are being set at key stage 2 for the bottom 20 per cent. of pupils in literacy and the bottom 25 per cent. in numeracy. If there are no targets for children at the bottom end, there is nothing for them to aim at and nothing to motivate and support teachers to help that group of pupils along. I hope that the Government are prepared to reconsider their policy of not providing targets for that section of the pupil cohort.

Mr. Blizzard: Now that the hon. Gentleman has outlined a number of deficiencies, as he sees them, in our education system, would he care to say how many of them could have been put right by increasing income tax by 1p? Is he saying that his party would increase income tax by 1p to put right some of the things that he says are so wrong?

Mr. Foster: I began my speech by talking about old battles and I am sorry that the hon. Gentleman wishes to return to one. We have made it clear that we would increase income tax to increase investment in education. The hon. Gentleman surely knows that it would not require increased investment to introduce targets for pupils at key stage 2. That is a matter not of investment but of educational common sense. It is a straightforward and positive suggestion.
Another issue that does not require increased investment is early-years provision. The Government rightly want diversity of provision to involve the private sector, the voluntary sector and the maintained sector. We very definitely welcome that move. Nevertheless, we are concerned about the way in which the system has been set up. As the hon. Member for Maidenhead rightly pointed out—let us not argue about the figures—there has

been a significant reduction in the number of pre-school playgroups available to participate in the partnership between the three sectors.
Solving a further problem, again without additional resources, could improve choice. The Secretary of State was perhaps somewhat unjustifiably proud of the new admissions code of practice. Some parents find themselves almost forced to put their child into a reception class to ensure that the child can get into year 1 of that primary school. When I first raised that problem with the Secretary of State, he promised to examine it. He subsequently came up with what he described as a solution. It was that a spare place could be kept in the reception class, thereby allowing the child to move in not from the reception class but from wherever else early-years provision had been made. However, that is not a realistic proposition because the tight funding regime under which schools currently operate means that no school will want to leave a place open if it will not receive funding for it. I ask the Secretary of State and the Government to look again at that choice.
In two other areas the Government could make a change of policy that would increase rather than reduce choice. The first relates to the way in which money is currently allocated. When the Government the other day accused many LEAs of holding money back at the centre and not passing it on to schools, they demonstrated a degree of hypocrisy. The Labour Government are increasing the amount of money that they are holding back at the centre and reducing the amount that they give to LEAs. The Government's own figures demonstrate that, in the first four years of a Labour Government, there will have been an increase in the Government's share of education spend from 38 to 42 per cent. and a corresponding 4 per cent. reduction in the amount that LEAs will have to spend. That is exactly what the Government accuse LEAs of doing. The Government are holding money back centrally and denying choice to the LEAs. That could be changed, as could the way in which the money that they hold back centrally is allocated.
As I am sure all hon. Members are aware, much of the money held back centrally is now allocated through a complex bureaucratic bidding system. Since the Government came to power, LEAs have made 25,000 separate bids for money. Only 9,000 have been successful. There is a one in three chance of being successful. Two thirds of the bids have required a huge amount of bureaucracy on the part of LEAs, yet some LEAs see nothing for it.
The distribution of the money is incredibly patchy. If one analyses where bids have been successful, one can find no logical pattern. They are not more successful in rural, urban, deprived or wealthy areas.

Mr. Vernon Coaker: What the hon. Gentleman has mentioned is a real problem. Does he accept that my right hon. Friend the Secretary of State said in answer to the hon. Member for Reigate (Mr. Blunt) that he would look at the problem? Everyone accepts that there is a problem in the bidding process.

Mr. Foster: The Secretary of State made that remark, but the concerns have been drawn to his attention for a considerable time and we see no change in the procedure. I welcome the hon. Gentleman's support in pointing out that the system has to be changed. I make my remarks as a positive contribution to the debate.
In some respects, the Government have got the provision of diversity almost but not quite right. We welcome the provision of specialist schools and beacon schools. However, we do not accept that there is a need for such schools to maintain the selective system that the Government promised to get rid of before they came to power. They are now going to continue it under the guise of selection by aptitude, yet not a single Minister has yet been able to explain the difference between selection by aptitude and selection by ability. We would far prefer specialist schools to be set up in an area and open to all pupils in that area. If it is a specialist music school, all pupils in the area—whether they are from a musical background or not—could benefit from that specialism. We do not need a selective system to run alongside the selective school approach.

Mr. Richard Allan: Does my hon. Friend accept that, for such schools to work, parents must be able to get their children into them, safe in the knowledge that they can fall back on the catchment schools? We still have a problem whereby if the catchment school is full with other first preferences, the kids are bumped off to a school that is perhaps many miles away.

Mr. Foster: My hon. Friend is right. He will know that in Committee we constantly argued against both the Rotherham and Greenwich judgments—another area of denial of choice for local education authorities.
In conclusion, we are in favour of choice and diversity, but we do not want the chaos and division that we had under the previous Administration. We very much hope that, under the new Labour Government, choice and diversity will not lead to centralisation and direction. At the moment, sadly, there is evidence that that is what is happening.

Liz Blackman: The bottom line in any debate on education is that parents must be in a position not to have to make a choice in terms of good-quality education for their children. Every parent wants that for their children, and it should be an expectation and a right. Clearly, that entitlement is not on offer universally, as the evidence shows. The Secretary of State referred to the shocking figures that we inherited in 1997, which showed that two out of five 11-year-olds were not reaching the expected standards of their age group. I was concerned, but not surprised, that that was not mentioned by the hon. Member for Maidenhead (Mrs. May).
In government, the Conservatives expressed concern about the need to improve standards—I acknowledge that. However, their analysis of how to raise standards was to implement a crude, market-driven mechanism—the internal market. Much was made of the exercise of choice, and some parents applied to get their children into high-performing schools, as any parent would do. The money and resources went with them.
The corollary was that there was no choice for the many. The children and parents who remained in poorer schools did so often because money was not available to ensure that they could travel to the schools that, in their perception, were performing better. Sometimes they were slow off the blocks, and did not understand the system.

Sometimes the schools were full, and sometimes the children were turned down. The poorer schools were often left struggling with diminished rolls and diminished pupil funding, and they faced a multiplicity of other problems that were not necessarily all of their own making.
All of this took place against the backdrop of national underfunding, no national strategy to address poor national results and no recognition of the needs of particular communities, some of which were far more severe than others. Teacher morale was at an all-time low. Ofsted has, and had, a place. However, without the support that I have outlined, it was difficult to work effectively to improve performance. Without making education a clear priority, Ofsted was, in the past, the diagnosis, but not always the treatment.
Our clear objectives are to inspect, measure and demand, but also to support. We have set them out clearly. All sectors of education and lifelong learning have been and will be supported, and there has been recognition of our policies from Opposition Members.
The Government made a choice—in our early years—to support the early years and the infant sector, and rightly so. There is no more critical time than when children are young and at their most receptive. Early-years education in my constituency is purposeful, appropriate and thriving. All four-year-olds are guaranteed a place, and many three-year-olds have access to good-quality education.
As a teacher, I can tell the House that class size does matter, especially with little ones. There was no choice in Derbyshire when we tried to teach children in class sizes of more than 40 in many schools in my constituency. We would have welcomed a policy from the centre to supply resources and to reduce class sizes, which were truly appalling.
Erewash schools, and the children in them, have benefited enormously from reduced class sizes through the abolition of the assisted places scheme. Erewash has benefited from money for new classrooms, and for the additional teachers who were essential to accommodate those reduced class sizes, as promised. That money has been forthcoming.
Schools have been maintained and improved, and the worst are beginning to be replaced. The £5.4 billion of new deal money is beginning to help. A pleasant environment without leaking roofs and with decent classrooms is not an add-on—it is an absolutely essential part of teaching children.
We targeted areas of special need where terrible social and economic problems abound, and we proposed partnerships. The sure start programme reaches out and embraces children and their families, to support them and to create a positive attitude to learning, right from the start. Education action zones lever in not only more resources, but innovative approaches to drive up standards.
I wish to refer to the literacy hour—the most innovative of all our policies. It has been planned and supported, and the resources have been put in place. It is producing stunning results. I agree with the hon. Member for Bath (Mr. Foster) that teachers work incredibly hard and put in a lot of extra time. However, any new change as revolutionary as the literacy hour demands extra time. It demands commitment, but the results are so positive that teachers consider the effort worth while. They see that all


the planning and preparation will pay off in the long run. The sheer hard work and grind will ease, as the programme continues to evolve.
The training and resources for numeracy hour that are coming on-stream in my constituency are extremely encouraging, as has been acknowledged. The preparations are going well and in many schools in Erewash, it is being tried out, with positive results.
Teachers in the primary sector of the national curriculum, who a few years ago struggled with innumerable folders, welcome a planned, structured timetable in which to deliver numeracy and literacy hours. The benefits are reflected not only in the children's progress in those core skills, but in a positive classroom attitude to children's learning generally.
I spent 25 years in a comprehensive school before I came to this place, and I can tell hon. Members that children have no choice whatever if they cannot read or write and if they are not numerate. They cannot access the curriculum, so it becomes irrelevant to them. They become frustrated and disaffected, they waste their time—unwittingly—and they waste teacher time, drawing teachers away from delivering learning, as they are supposed to do. Other pupils become frustrated as well.

Dr. Julian Lewis: I entirely agree with the hon. Lady's last point. Does she accept that such damage is done long before the age of 11 is reached? Will she, therefore, join me in recommending that the results of the tests that are already done at seven should be published, so that parents can put pressure on failing schools at that stage?

Liz Blackman: No, I do not agree with the hon. Gentleman, for two reasons. First, I agree that the damage is already done by that stage. That is why, when the Government came into office, they specifically targeted the early years and the infant sector. Secondly, the Secretary of State spoke about the Opposition's complaints about additional bureaucracy. Other measures are in place to support teachers and drive up standards.
There is no choice for children who cannot access the curriculum, and because they leave school with such poor core skills, there is limited choice when they move into the world of work.

Mr. Don Foster: If the hon. Lady shares my concern for the bottom 25 per cent. of pupils, does she agree that there ought to be a set of targets for those pupils in literacy and numeracy?

Liz Blackman: I agree that when teachers deliver literacy hour, they should take account of the diverse ability of their charges and the point that the children have reached in their learning, as all good teachers do. In certain elements of the literacy hour, teachers can do that.
I am not against choice or a fair admissions policy that allows choice. I am certainly not against high standards across the board, as that gives real choice. I am not against diversity. I have a beacon school and a specialist school in my constituency. Challenging and appropriate work ought to go on from early years, right the way through school, including literacy hour.
I am extremely pleased with the Government's initiative which allows an alternative curriculum for pupils over 14 if it is more appropriate for them. Some of the children in school are disaffected or unable to access the curriculum for all the reasons that we are discussing. They would be better served by a tailor-made curriculum, designed in co-operation with local colleges and other education providers.
Every school should have its own ethos, and does in my constituency, but the Government should take responsibility for determining standards. There has been a standards vacuum for the past 18 years. There ought to be central guidance, as there are many changes to be made.
A great deal of work is being demanded of teachers. A large part of the teaching profession is committed to that. Radical change cannot be introduced in any walk of life without commitment and hard work, but if the changes are worth making, it is worth asking teachers to go that extra distance to deliver the positive results that we already see speeding through. The benefits of national literacy hour and of numeracy hour as it comes on-stream will be enormous, not only for this generation, but for generations to come.

Mr. David Lidington: None of us, whether speaking as a Member of Parliament or as a parent, would disagree with the hon. Member for Erewash (Liz Blackman) that we should be doing all in our power to help to raise educational standards, in particular those of children who are not the most able. I agree that they have been neglected by decision makers in politics and in education for decades. However, I confess that I would have listened to her with greater sympathy had she paid due regard to the various initiatives of the Conservative Government: the introduction of independent inspection, regular testing, the publication of test results, league tables and the supply of information to parents. Ministers are now willing to take many of those initiatives on board in some form or other, even though they fought them tooth and nail from the Opposition Benches as Conservative Ministers took them through the House.
A number of colleagues hope to catch your eye, Mr. Deputy Speaker, so I shall concentrate on two issues: grammar schools and sixth forms, both of which are of particular interest to my constituents. I must take up the remarks of the hon. Member for Bath (Mr. Foster). In response to one of my hon. Friends, he referred somewhat disparagingly to what he described as nice schools for nice kids. He used that expression to caricature the approach of those of us who argue for selection in education, whether on academic abilities conventionally measured or on aptitude. I believe passionately that he is wrong to do so.
I was a governor of a north London comprehensive some years ago and I found that the way to guarantee that the so-called nice kids—the children from the well-to-do families—attended the nice schools was to confine parental choice to the neighbourhood catchment comprehensive so that selection was by parents' ability to afford a mortgage in the catchment area of the right school.

Mr. Don Foster: Although I thank the hon. Gentleman for drawing me back to the Chamber to listen to his


contribution, I fundamentally disagree with him. For every grammar school, we needed three secondary moderns; people tried to tart them up and call them something else. Surely we want to end competition between schools. We need choice within each school and all schools providing high-quality education rather than choice between schools.

Mr. Lidington: That was the dream of the champions of comprehensive education in the 1950s and 1960s, when they advocated the end of selection. The trouble was that it did not deliver the improvement in educational attainment that the advocates of the comprehensive system had argued would take place. To deliver a wide choice of subjects in a single school, people were led ineluctably to argue for the creation of large secondary schools, which entailed all the difficulties of pastoral care, schools on split sites and, in some cases, keeping order.
As the hon. Member for Bath knows, my county is the only one to retain an entirely selective secondary system and the only one to.maintain, without a break, overall Conservative control of its council. I believe that the model of selection that is developing there is true to the vision of R. A. Butler and the Education Act 1944. This country went wrong when, in the old days, it looked on secondary modern schools as a dumping ground and thought that only the grammar schools mattered. Nothing could have been further from what Butler wanted to achieve.

Mr. Willis: I am grateful to the hon. Gentleman for giving way, even though he is in full flow. I cannot resist asking him a simple question: how many parents in Kent, where people are so proud of the selective system, have contacted him to say that they want their child to go to a secondary modern school?

Mr. Lidington: As I am not a Kent Member of Parliament, the question does not really arise.
I have found that certain schools in my constituency are achieving better results—as measured by public examinations—than comparable comprehensive schools in Hertfordshire and Milton Keynes. We would expect grammar schools to achieve higher standards—and they are: that has been acknowledged by the chief inspector of schools, who has singled out a number of Buckinghamshire schools, both grammar and upper, as demonstrating excellence. Even the Government have recognised the achievement of those standards: they have nominated Aylesbury high school, a selective girls' grammar school, as one of their "beacon schools".
In other schools in my constituency, children are being very well educated in conventional academic subjects and—especially in the sixth form—being educated in general national vocational qualifications. That is introducing a new enthusiasm among both students and staff.

Dr. Stoate: Does the hon. Gentleman agree that a fully selective system poses a danger? Schools that are non-selective, such as secondary modem schools, tend to involve a high level of special needs and are, therefore, greatly disadvantaged when it comes to competing. Because schools in my constituency, such as Dartford West high school for boys, have extremely high special

needs levels, they receive the worst reports from the Office for Standards in Education. As a result, they are branded as special needs schools, and the county council closes them, or attempts to close them. That reduces parental choice.

Mr. Lidington: The hon. Gentleman has put his finger on a point that is by no means specific to a selective system of education. In my constituency, the problem that he mentions applies to individual schools with certain types of catchment area. The hon. Gentleman will probably agree that he would find comparable problems involving the disproportionate concentration of children with special educational needs in an all-comprehensive system, because that is the nature of a system that relies on catchment areas.
The selective system in Buckinghamshire works well. It is achieving results: my county is at or near the top of the Government's league table in regard to both A-levels and GCSEs. It is wrong for the Government to create the uncertainty that they have created with their legislation on grammar school ballots, leaving schools unsure, year by year, whether they will have to engage their energies in fighting to maintain their current status. Moreover, local education authorities must always bear in mind whether they are likely to face a huge financial and organisational upheaval.
The Labour party has gone a bit quieter—in the Chamber, if not in Buckinghamshire county council—about its opposition to selection, but I was pleased, from a constituency point of view, to hear the hon. Member for Bath restate so firmly his party's opposition in principle to selection in education. That is something that Liberal Democrat councillors in Buckinghamshire tend to keep mum about at every opportunity.
It is nice to hear, from time to time, the honesty of the hon. Member for Harrogate and Knaresborough (Mr. Willis). I suppose that, by analogy, he must imply something less than honesty on the part of Liberal Democrats councillors in my local education authority.

Mr. Hilary Benn: Will the hon. Gentleman give way?

Mr. Lidington: I will give way briefly.

Mr. Benn: I thank the hon. Gentleman.
If comprehensive reform has been such a failure—and that seems to fly in the face of the evidence of a rise in educational attainments and achievements since its introduction—will the hon. Gentleman explain why there is absolutely no evidence that parents wish to return to a widespread system of selection? Does he accept that, as the hon. Member for Harrogate and Knaresborough (Mr. Willis) suggested, no parents want their children to attend secondary modern schools?

Mr. Lidington: The evidence with which I am most familiar—from my own constituency, where a selective system has been maintained consistently—shows that there is considerable public support, as demonstrated in local election results, for a selective system. The approach in areas that have opted for a comprehensive system should be to develop the initiatives of the previous


Government, by allowing greater specialisation, in specific subjects, in individual comprehensive schools within a local education authority area.
Sixth forms were one of the subjects dealt with in the Government's recent White Paper. I should, at the outset, say that I think that the idea of encouraging co-operation between local education authority schools and colleges is sensible, and that, equally, I fully support the Government's announced emphasis on trying to raise the standards of those who are not the highest fliers academically.
One of my fears—I hope that, in his reply, the Minister will allay some of them—is that the Government have a hidden agenda. Despite the assurances that the Secretary of State gave in his statement, the current edition of The Times Educational Supplement remarks that only
A last-minute intervention by the Prime Minister…saved small sixth forms from abolition",
that
The original plans for this week's White Paper on post-16 reforms intended that sixth forms and colleges should be given equal funding",
and that that
change would have left small sixth forms vulnerable.
The article goes on to say that the Prime Minister
called for changes"—
not out of principle, but—
because any perceived attack on sixth forms would lose votes in Middle England.
I have several fears about the Government's options for the future of sixth forms. It is proposed that, at the very least, local education authorities should be subject to departmental guidance on how they plan and manage post-16 education. One of the options is that, rather than local education authorities being funded by revenue support grant, they should be funded by the new learning and skills councils.
One fear is that the Government are in danger of throwing the baby out with the bath water. The Government have promised to maintain sixth form funding at current levels in real terms, but they have already said that they will not provide extra money to school sixth forms to cope with the proposed new A-level curriculum. I wonder whether Ministers have a similar plan to cap sixth form grant or expenditure in subsequent Department for Education and Employment initiatives.

Mr. Blizzard: Will the hon. Gentleman give way?

Mr. Lidington: If the hon. Gentleman will forgive me, I shall not, as other hon. Members wish to speak.
There is a risk of a top-down system that relies not on the preference expressed by students or their parents, but on the decisions of central planners on a regional committee.
What will happen to capital expenditure decisions? Who will take them? I am very interested in the answer to that question, as the population of Aylesbury—and of mid-Buckinghamshire generally—is growing fast and, at some point in the not-too-distant future, my constituency

may need another secondary school. Under the Government's new proposals, how would a decision on accommodation for post-16 education be taken?
Do the Government have a view on the minimum size of a viable sixth form? In the previous Parliament, when I was on the Education Select Committee, one expert witness said that 250 was the bare minimum.

Mr. Don Foster: Three in a primary school.

Mr. Lidington: Am I am being bid up to 300 by Liberal Democrat Members?
A minimum limit of 250 would have very serious implications, particularly for sixth forms and for secondary schools in rural areas. I hope that the Government, in future plans, will take account of the fact that many parents prefer school sixth forms to colleges—because of the pastoral care that they can provide, and their ability to offer minority subjects, such as classics, and opportunities in music, drama and sport, which many employers think help to provide a rounded candidate, with the right core skills, when it comes to selecting an applicant for a job. Such concerns have been expressed to me by education managers and teachers, and I hope that the Minister will respond to them.

9 pm

Mr. Malcolm Wicks: I welcome the debate on choice and diversity. Soon we shall approach the end of the century, our first of full democracy and citizenship. Universal suffrage came for the first time, and this century enjoyed the advent of the welfare state and the national health service. The provision of state education also arrived for primary school children and, with the Education Act 1944, for secondary school children, too. It is interesting to note how recently state secondary education arrived.
We ought to try to relate two sets of themes. Equality and fairness sometimes seem to conflict with diversity and choice, but they need not. The new agenda facing education is how we relate those two themes to each other. The advent of state education for every child brought the principle of equality into practice. Each and every child was important and deserved good state education. The left and right of British politics may have talked differently about equality, focusing on equality of opportunity or some more fundamental form of equality, but all of us agreed on the goal of equal provision for every child.
It is useful to review the results of our first century of citizenship and democracy. I do not have the time to do a full audit, but there have been successes and failures. Numeracy and literacy have risen and more of our children have been able to achieve good GCSEs and A-levels. It is fantastic that about a third of our children will go to university. One day it will be 40 per cent., and perhaps one day 50 per cent. That is a remarkable success story.
However, the success is blended with some failure. Gross inequalities have continued in our society in education and in many other matters. It is a sorry fact that knowing which house or estate a child came from, or knowing his or her postcode or his or her parents' occupations, allowed us to make a good—though not always accurate; there are many exceptions—stab at


predicting that child's educational outcome. We could also predict the child's broader life chances in health and in many other areas.
The annual report of the Universities and Colleges Admission Service shows that only 10 per cent. of university entrants came from social classes 4 and 5, although those classes represent nearly a quarter of the population. That is a gross inequality. The youth cohort study shows that by 1996, eight out of 10 state school pupils from professional families gained at least five good GCSEs, while only a fifth of children from households in which no one was in paid employment achieved the same. Despite our successes, which I applaud, at the end of our first century of state education, the system still mirrors inequalities rather than breaking them down.
Equality and fairness are among the great themes of our century; diversity and choice provide the other important strand. The 1944 Act had its own agenda on diversity and choice. Although it brought in secondary schools, it also brought in grammar schools, technical schools that never developed in any great quantity, and secondary modern schools. Later, Labour Governments in particular pushed comprehensive schools and we got into the debate about the comprehensive school versus the grammar school. I agree with the hon. Member for Bath (Mr. Foster) that that debate has become rather old-fashioned. Equality and diversity appear to have been in conflict in the public and private sectors.
Although many working-class children go to grammar schools, there is still an equation between socio-economic background and access to grammar school. I was struck by the evidence printed in Hansard on 20 May that used free school meals as an indicator of socio-economic disadvantage. It tells us how many children at grammar schools receive free school meals and compares that figure with the number of children in the relevant local education authorities who were receiving free school meals. In Barnet, 16 per cent. of children attending secondary schools receive free school meals, compared with 1.4 per cent. of those attending grammar schools. In Bromley, 14 per cent. of children receive free school meals, compared with 1.2 per cent. of children at grammar schools. In Birmingham, 34 per cent. of children receive free school meals, compared with only 5 per cent. of children at grammar schools. In Liverpool, 39 per cent. of all secondary school children receive free school meals, compared with just 6 per cent. of children at grammar schools. In Buckinghamshire, which is a pretty wealthy county, 7 per cent. of children receive free school meals compared with just 1.6 per cent. of those at grammar schools. The point is proven.
Some of my right hon. and hon. Friends ask those who support grammar schools to say more about the children who never get to grammar school—in other words, most children. We have to recognise the skew in terms of socio-economic background. It is not surprising, but it is worth emphasising.
Let me change gear now and say that the Select Committee on Education and Employment, which I have the honour to chair, is interested in these themes. We are about to undertake an inquiry into the relationship between public and private education. Owing to the involvement of the private sector in education action zones and other developments in which—perfectly properly, in my view—the Government are trying to bridge the gap between public and private education, we

feel it appropriate and timely that the Select Committee should undertake an inquiry into the role of private companies in the management and supply of state education services. We take our first evidence on 10 July and I hope that our report will be of interest to the whole House.
Another illustration of the need for diversity and choice is the necessity to pay more attention to highly able children. The Government prefer the term "gifted" children. I am not worried about the terminology, but we are all concerned—as was the Select Committee when we published our report—by the fact that most schools neglect highly able children. To put it rather graphically, a number of potential Nobel prize winners are sitting in our schools rather sulkily, bored out of their minds because they are not being stretched. That is partly because schools are often more concerned with helping children who are struggling and with average standards.
We neglect the highly able child at our peril, however. The Select Committee made the strong recommendation that every primary and secondary school should have a senior member of staff as a co-ordinator, looking out for the highly able boy or girl.
I said at the beginning that this was the end of the first century of democracy and citizenship in our society. In the education agenda, we find ourselves hovering rather anxiously between three centuries. I do not think that anyone would have predicted in 1944, or at the beginning of this century, that two of the major concerns of Parliament and Government at the end of the 20th century would be literacy and numeracy.
That was the agenda in the 19th century, when primary education was introduced, yet here we are—perfectly properly, because too many children do not get to grips with reading, writing and arithmetic—introducing literacy hours and numeracy strategies. There is something sad and ironic about the fact that we are tackling a 19th century problem when we are trying to summon up the energy to enter the 21st century. The 21st century education agenda should be about creativity and new technology unleashing all sorts of benefits for our young people.
How are we to relate the two important themes of equality and fairness, and diversity and choice? Parents and children want choices. What policies and practices will enable us not to take sides but to pursue the two themes together? That is the challenge in education today.

Mr. Christopher Fraser: Education is rightly put at the heart of the political debate. It affects everything, from the nation's competitiveness, skills and employment to the social conditions of our society. I cannot put it better than the headmistress of Parkstone grammar school in my constituency, in a recent letter:
Education is the single most effective route out of poverty.
The Secretary of State said that he wanted to talk about the many, not the few. I want to do the same: the whole issue of diversity and choice is about the many, not the few, as Conservative Members have said. There are 39 schools in my constituency. Above all, we have choice. There are seven secondary schools and active sixth forms, with two grammar schools, Parkstone and Poole. Many of our schools feature regularly at the top of


the league tables. For good measure, we have one independent school. Four of the seven secondary schools are grant maintained.
In my election pledge, I stated that
we owe it to our younger generation to give them the best start in life to succeed in a competitive world.
There must be choice and opportunity for all abilities so that we can all be members of a skilled and prosperous workforce, embracing the technological revolution.
Two and a half years later, I stand by those words; but can the Government claim to have stuck to their words and pledged intentions?
The 1997 Labour manifesto stated:
Labour will never force the abolition of good schools whether in the private sector or the state sector".
I believe that the Government's plans for grammar schools renege on that pledge. The plan to allow the fate of grammar schools to be decided through a ballot of parents from feeder schools is a centralist plan imposed on a local community.
The question is not balanced, as in some schools parents will not be able to vote, yet parents with children at feeder schools, who may not want to send their children to the grammar school, will have the final say on the future of other people's children. The proposals will alter who has a say on the issue, and are thus unfair: after all, if one asks a loaded question, one tends to get a loaded answer.
Above all, this country needs choice in education. The right to decide is imperative for a parent. Every child is different and parents know best what is right for their child. Not all children are academic, and vocational skills must be taken into consideration. Taking away choice and diversity limits the opportunities that will best suit the child.
The whole community should decide the fate of a school. A constituent wrote to me recently:
Why do we need a ballot, (surely a good school will thrive and a bad school will wither.) If there are 5 people chasing every place at a grammar school—the choice has been made, the school should be kept.
We also have excellent non-selective or grant-maintained schools in my constituency which produce superb results and are equally popular, and which have equal standing in the eyes of the community and of parents, who have a valid role to play in the diversity and choice in the education that they have chosen for their children.
If a school's status or the choice available to parents is changed, repercussions will inevitably be felt in an area's whole education system and in the pattern and structure of admission numbers. However, the cost of the exercise could easily render it a wasted effort when it comes to raising pupil achievement.
Mr. Alex Clark, the headmaster of Poole grammar school, told me:
If the Government genuinely believes in the overriding priority to address standards and not structure, why does it not at least postpone the issue of grammar school ballots by three or four years? This will allow the maximum effort to meet the required standards by 2002. In that time they may…come to realise the very important dimension to education provided by grammar schools.

The irony is that certain members of the Labour party have, in the past, exercised choice for their own children. There is nothing wrong with that, but the drawbridge is being pulled up after them to prevent other parents having the same choices and opportunities.
I turn now to the Liberal Democrats in my constituency. Unfortunately, they run Poole council for the time being. However, East Dorset and Purbeck councils have been Tory since May, so there at least we can express an opinion about education. Sadly, the Liberal Democrats still run Dorset county council. If they remain in power, they will have the choice to pursue their agenda, but parents will not have a choice.
The Liberal Democrats have made what they think about grammar schools clear. During proceedings on the School Standards and Framework Bill, the hon. Member for Harrogate and Knaresborough (Mr. Willis) said:
We make it clear that we are opposed to grammar schools and selection, partial or otherwise."—[Official Report, Standing Committee A, 24 February 1998; c. 616.]
The Liberal Democrats say that they are opposed to ballots as well, so what will people in my constituency do when the time comes for the two grammar schools to be subject to a local ballot, as will happen? The position of parents will not be represented fairly. Given that the Liberal Democrats on the council are not in favour of a ballot and they do not agree with selection in schools, the parents will be on a hiding to nothing.

Mr. Don Foster: Will the hon. Gentleman give way?

Mr. Fraser: No, as I promised to keep my remarks brief.
I am afraid that my constituents whose children attend those grammar schools will be sorely misrepresented by the present council.
Regulations stifle diversity. The increase in bureaucracy has involved 322 new directives in the two years since the Labour Government took office. The fine words about cutting red tape and raising standards have evaporated into a thick og of regulation that has had an adverse impact on schools.
I visit a lot of schools in my constituency, and have got to know the head teachers. They have made it clear that increased bureaucracy could seriously damage children's education, rather than improve it. Head teachers repeatedly tell me of the frustration they feel. The ever increasing amount of regulation and change comes at the expense of work at the chalk face. After two years of the Government's management of the education system, teachers have come to realise that the real agenda is to control the country's 25,000 schools directly from Whitehall, and to stifle all local initiative.
Another constituent wrote to me last week, as follows:
Although the Government has repeated the mantra of 'standards not structures', the barrage of initiatives which has been launched this year by the Government seems to have left the central theme of pupil achievement by the wayside.
In my speech, I have used real quotations from constituents. They are concerned about education: it is their children who must use the schools in my area. I want the Government to tackle the genuine anxieties that they have expressed. The Government have dismantled the framework and management of grant-maintained schools, and the preoccupation with staffing and financing that has been unleashed is very often to the detriment of children.
Schools in the new unitary authority of Poole must also deal with reassessing their needs and sorting out what happened under the old local education authority. The relationship with the LEA has naturally overlapped with what is being undertaken now.
The process has not been easy. Schools must now deal with the Government's new fair funding system, but they are coping. However, Dorset has lots of rural areas, and schools in the rural part of my constituency are not being treated so well. Mr. Stuart Clarke, a head teacher there, has written to me on the subject. He is the head not of a grammar school, but of a comprehensive school—Lytchett Minster upper school. He voiced his concerns when he told me that
rural schools such as mine which attract neither urban nor rural priority…are located in an authority which delegates funds at a lower rate than most other authorities.
He said that such schools
find themselves in a funding vacuum that prevents them from forging ahead with new initiatives. The Government is also determined to ignore them.
In Dorset and the borough of Poole, we have a problem with lack of funding; it is an issue. Despite that, the range of schools in my constituency do well, as they are well-managed and offer not only excellent academic standards but a true choice that reflects the diversity of the community that they serve. I would like that to continue.

Mr. Vernon Coaker: At its heart, the Conservative motion supports not a diverse but a divisive education system, the aim of which is to increase selection, to protect GM schools and to make the post-16 debate into a campaign to save sixth forms—a choice for a few, but not the many. That may be the real world in a small part of the country, but that agenda bears no relationship to the country as a whole—a country which, under the previous Government, saw unbridled competition leading to sink schools, large classes, schools in disrepair and poor standards. As many hon. Members have said, there were appalling levels of numeracy and literacy, which effectively debarred any child from achieving anything. There were real-term cuts in school funding.
The new Labour Government have set about modernising the education system, based on the comprehensive principle and social inclusion. That will mean real choice and diversity. We have new money for books and buildings, numeracy and literacy strategies, class size initiatives, increases in the standards fund, and money to improve pay for teachers.
May I tell the Secretary of State for Education and Employment and the Minister for School Standards why I am proud of the new Labour Government? We want excellence, academic success and achievement, but we want it for every child. That is why so much of what the Government are doing in education links with their other social policies. If we want to tackle under-achievement across the board, we will have to tackle the problems of social exclusion and social failure and the context in which schools operate and work.
That is why sure start is so important, starting when children are at an early age alongside nursery education. That is why the new deal for communities and excellence in cities, education action zones, health action zones and

the Crime and Disorder Act 1998 are so important. All those things will be crucial if we want to tackle the under-achievement that is endemic in half our schools.
The new educational maintenance allowance is crucial, but if we could extend it to all pupils, it would help more to go into further education. Relaxation of the key stage 4 curriculum is important, too. It gives the vocational element to 14 and 16-year-olds where they become particularly disaffected. They have something more tangible to be at school for. The post-16 White Paper, protecting sixth forms but looking to extend and to expand opportunity for all, is another important move. That is real choice, real diversity, a celebration of success, while meeting head on the challenge in the most difficult areas.
I go on to a pet theme of mine. If we really want to do something to improve achievement in our secondary schools, we will have to look at the curriculum in terms of 14 to 19. We will have to get some of our people to stay on at 16 if we hope to get them into higher education.
The Tories seem to want to protect only the privilege of a few, but we seek to extend opportunity for the many. So much will depend on the joined-up nature of all that.
On teachers, of course, the contract needs modernising. I say to many of my friends in the teaching profession: for years, the cry was that a teacher could get promoted only out of the classroom—they had to take a management responsibility to get promoted. Under the new contract, they can get promoted for being a good teacher and then stay in the classroom. That will do much to improve standards. Alongside that, it is important that we do not set a quota on the number of teachers who can cross the threshold. If they are good enough, they should be paid and allowed to pass through.
One legitimate concern, which I know the Minister shares, is the work load. We need to take account of the fact that teachers are telling us that they are finding it difficult. If we can continue our efforts to find ways to reduce bureaucracy, it would be helpful. We need to keep talking and negotiating to achieve a just outcome. I met some head teachers in Nottinghamshire on Friday. The work load was the issue to which they drew my attention—it was more important to them than pay and many of the other issues that are often raised.
This Government will go down in history as one of the truly radical Governments—a Government who have sought to deal with the social context in which schools operate, as well as the operation of schools themselves. If we want to raise achievement, it is essential that we realise that schools cannot continue to operate as social hospitals, with teachers being asked to deal with almost every social problem that can arise. Of course, teachers and schools have a responsibility and duty to do something about the problems that come to them, but schools need the support of the community around them. They need the other policies that we have mentioned if they are to achieve their goal of raising standards.
The Tory objective is simple. People often say that there are no differences between the Labour and Conservative parties—it has been said to me. In all honesty, people who read the Hansard of this debate will see clear water between us, and I am proud of that. In essence, the Tory party today is standing for more selection, the protection of grammar and grant-maintained schools, and the protection of an education system that is


rooted in the past. That policy would allow some schools and pupils to achieve, but it would not give opportunity to all children.
I congratulate my hon. Friend the Minister on being part of a team that has recognised that, if we are to achieve what we want in our schools, we need to tackle social exclusion and to ensure that all pupils have the opportunities to which they are entitled. We need to ensure that all schools succeed and that none are written off, as they have been in recent years.

Mr. Cynog Dafis: I will be as quick as possible. I want to make a brief contribution about the need to apply the principle of choice and diversity in Wales. I would argue that diversity ought to apply territorially, especially at this time, and not specifically in relation to the Government's proposals for the teaching profession.
That subject was recently debated in the National Assembly for Wales, of which I am proud to be a Member. I spoke in that debate to a Plaid Cymru motion that rejected the notion of payment by results and called for an alternative approach to be developed in Wales. During that debate, it became evident that a clear majority in the Assembly were in favour of the Plaid Cymru motion. The motion that we tabled certainly reflects the majority view in Wales as a whole.
As was said in that debate, Plaid Cymru accepts that the system of teacher remuneration and professional advancement needs reform. I agree with the hon. Member for Gedling (Mr. Coaker) about that. It is important that teachers should be rewarded for remaining in the class room and for being good teachers—I agree 100 per cent., speaking as a former teacher who never left the classroom for a management position. For that to happen, it would require an evaluation of teacher's performance—their expertise, commitment and professional development.
We are not arguing at this stage—we would not want to close off options for the future—for a separate pay bargaining structure for Wales, or for disparities in pay levels. However, we are arguing that Wales must be allowed to identify and apply criteria and processes for professional advancement and higher pay that might be different from those to be implemented in England. To make it clear, one element that we find totally unacceptable in the Government's proposals is the link between teachers' remuneration and pupil performance—or outcomes. That is certain to lead to injustice and to undermine teamwork. I am sure that many in this Chamber would agree with that.
We also reject the notion of linking teachers' eligibility for annual increments to the process of annual appraisal, as is stated in the technical notes that were published in both England and Wales. That would be intensely bureaucratic and time consuming and undermine the useful role of the annual appraisal when it is used well in schools. That process is based on trust. It is about identifying teachers' strengths and weaknesses, about teachers confessing, as it were, to their weaknesses, and about identifying means by which strengths may be developed and weaknesses corrected.
However, I do not want to get into detailed consideration of the merits and demerits of the Government's proposals, which are, by the way, just

about identical for England and Wales, even though we have had a separate Green Paper. I emphasise that it would be entirely unacceptable if Wales, especially now that it has its own National Assembly, were forced to swallow the Government's nasty medicine in order, according to the Government, to make us better.
The suggestion has been made—it was made just before the election by the Under-Secretary of State for Wales, the hon. Member for Neath (Mr. Hain)—that, unless we in Wales agree to implement the Government's package in total, including payment by results, resources to improve teachers' pay will not be made available. That is totally outrageous. If it were applied, it would arouse fury in Wales and would be very damaging to the Government party in Wales, which has already suffered some damage, although there may be more to come.
In the debate in the Assembly, our group showed that it was prepared to be flexible. We did not oppose the amendment tabled by the Government of Wales, which was weaker than our motion. We suggested inserting the adjective "crude" before the sentence on links between pay and results. Ironically, both the Tories and the Liberal Democrats in the Assembly voted against the Government amendment, whereas we abstained.
We were flexible on the understanding that the relevant Assembly Committee and its Cabinet would develop an alternative set of proposals, based on a Welsh consensus, that addresses the needs of Wales, and that the Assembly would be able to implement such a set of proposals. It should be clearly understood that, if that does not happen, and if the Assembly Cabinet merely develops proposals that simply toe the United Kingdom Government line, the Assembly can and will defeat the proposals.
In this debate, I merely wanted courteously to ask the Government to ensure that the Assembly be given the flexibility—freedom is the right word, I think—to do what it regards as best for teaching and learning in Wales. That is no more or no less than we deserve.

Mr. James Clappison: This has been an important and valuable debate, which has highlighted the way in which the Government's policies are curtailing choice and opportunity in education. My hon. Friend the Member for Maidenhead (Mrs. May) began the debate with a powerful speech, in which she described the damage that the Government have caused, and are threatening to cause, not least to pre-school provision, rural primary schools, sixth forms, grant-maintained schools and grammar schools.
My hon. Friends have made some excellent speeches. My hon. Friend the Member for Aylesbury (Mr. Lidington) made a very thoughtful speech, outlining the threats posed to Buckinghamshire educational system and to sixth forms in his constituency. He made some thoughtful points about the unconvincing assurance given by the Government on future funding of sixth forms and the possible problems in coping with future demands on them.
My hon. Friend the Member for Mid-Dorset and North Poole (Mr. Fraser) touched on some important issues for his constituency and its two grammar schools. My hon. Friends the Members for New Forest, East (Dr. Lewis) and for New Forest, West (Mr. Swayne) have been listening attentively, and I know from previous debates,


including an Adjournment debate last week, that they are very concerned about the threat to local grant-maintained schools and their funding.
It is always a great pleasure to hear from the hon. Member for Bath (Mr. Foster). The theme of his speech was moving on. Thinking back to our debates on the Education Bill in 1993, when the hon. Gentleman spoke at length, I found it hard to identify how he had moved on. He was still saying that the Government were not spending enough and the Liberal Democrats would spend more. I listened for long enough and eventually we heard about the magic penny as well. I agreed with the hon. Gentleman on targets for the lowest 20 or 25 per cent. Without going into the overall merits of target setting, we need to have high expectations for all our pupils, including the lowest 20 or 25 per cent.
After praising the Government, the hon. Gentleman then attacked them on their education funding record, pointing out that the Audit Commission had said that funding per pupil had gone down under this Government. It is difficult to know what the Liberal Democrats found to praise after the hon. Gentleman attacked the central pillar of the Secretary of State's case.
I also listened with interest to the speech of the hon. Member for Croydon, North (Mr. Wicks). I did not agree with all of it, but he made an important point about the need to increase the number of children from lower income families who go on to university. I am sure that the hon. Gentleman agrees that we must look with concern at the effects that the Government's package on tuition fees and maintenance grants has on the number of children from those backgrounds who have the opportunity to go on to higher education.
I am afraid that I do not have sufficient time to mention all the contributions from Labour Members. Suffice it to say that I think that there was a narrow majority of those who had the benefit of a grammar school education over those who with the benefit of a public school education.
The Secretary of State also took as his theme the need to move on. On grammar schools and grant-maintained schools, the Government have moved on most from the promises that they made before and immediately after the general election. We heard this afternoon about the promises that the Prime Minister gave to the voters of Wirral, South in 1997 that parents there need not worry about a Labour Government doing away with their grammar schools. Barely a month before the general election, he promised in The Times Educational Supplement that "grant-maintained schools will prosper". In her analysis of the funding position of grant-maintained schools and her long list of schools throughout the country that have had difficulties, my hon. Friend the Member for Maidenhead gave the lie to that.
After the general election, we were told by the then Minister for School Standards that the Government's aim was to level up, not level down. He told the Standing Committee considering the School Standards and Framework Bill:
We have said that our objective is not to cut the amount being spent on pupils in GM schools, but to increase the funding for pupils in other schools. We are therefore levelling up."—[Official Report, Standing Committee A, 12 February 1998; c. 461.]
If that was the Government's objective, they have failed. Nobody has admitted that more clearly than the Secretary of State, who said that there was a need to introduce cash

protection and transitional funding for grant-maintained schools to protect them from the budget shortfalls that they have experienced.
My hon. Friend the Member for Maidenhead cited grant-maintained schools throughout the country that have experienced serious difficulties because of budget deficits, causing great problems for the education of their children. My hon. Friend could have added to that list schools in my constituency, including Wroxham school, which I visited this morning. The Secretary of State spoke of moving on, but all that have moved on from Wroxham school are classroom assistants and learning support assistants, who have been forced to do so by the school's £30,000 deficit.

Miss Melanie Johnson: Will the hon. Gentleman give way?

Mr. Clappison: Yes. Perhaps the hon. Lady will tell us about the difficulties experienced by schools in her constituency.

Miss Johnson: I want to ask the hon. Gentleman the question that I asked the hon. Member for Maidenhead (Mrs. May) earlier. Does he support the present Tory leader of our county council, who proposes not to send an extra 6 per cent. of funding to schools next year? Those schools include ones in the hon. Gentleman's constituency and mine, which will have to make cuts as a result of the failure to send on the extra money that the Government are spending on education, or that they would spend if Tory-run councils would let them.

Mr. Clappison: The hon. Lady knows that the budget for Hertfordshire was set by the so-called administration group, which was Liberal-Labour controlled. The Secretary of State had to write to that group to complain about the amount of money that it was withholding from schools.
Schools have suffered up and down the country. The Secretary of State prayed in aid the words of Mr. Bob Lloyd of the grant-maintained schools joint monitoring group. That is the same Mr. Lloyd who provided us with an analysis of the position this year, rather than next year, which the Secretary of State was talking about. Mr. Lloyd describes the present position in grant-maintained schools and the practical consequences of the Government's policies. The average grant-maintained secondary school on cash protection—two thirds of them are on cash protection—is £96,000 worse off, which equates to approximately four teaching posts. Grant-maintained primary schools are, on average, £22,000 worse off, which equates to one teaching post.
Wroxham school in my constituency is aware of the Secretary of State's announcement about next year, and it is hardly dancing with glee about his alleged generosity in providing the school with barely enough of an increase to match inflation, when the school is already suffering a serious deficit in its budget and the classroom and learning support assistants have already gone. That is the overall picture for grant-maintained schools and, if that is prosperity, goodness save us from this Government and their idea of prosperity.
The Prime Minister has clearly moved on from his promises about grammar schools made before the election. He said:
The reason why I don't say it's part of the Government's policy to get rid of all grammar schools is that I think if a school's doing a good job, then you don't want to get rid of that school.
Having listened to this debate and heard speaker after speaker express hostility to grammar schools, I know that the Prime Minister's sentiment is not shared by the vast majority of his Back-Bench colleagues or, apparently, by many Labour activists.

Dr. George Turner: Will the hon. Gentleman give way?

Mr. Clappison: No. [HON. MEMBERS: "What about ballots?"] Hon. Members mention ballots. The Prime Minister told us today that there was no need to worry because there had been no ballots and there was no need for scaremongering. In fact, ballots cannot be held until September. The Department for Education and Employment has received inquiries from campaigners against grammar schools, many of whom are Labour party activists, about petitions to get rid of grammar schools. The Minister will be aware of newspaper reports about Labour activists throughout the country using Labour party offices, presumably with the blessing of some of the MPs who have spoken this evening, for their campaign to get rid of grammar schools.
I agreed with the remarks of my hon. Friend the Member for Aylesbury. What do those activists think will be the effect on children and teachers in those schools of the prospect of upheaval of months and months of campaigning? Nothing could be more calculated to damage the provision of education in those schools.
What will be the consequence in the long run? [Interruption.] Hon. Members do not want to know, but let me remind them of the likely consequences of the upheavals that they propose. Eric Hammond, former union boss and governor of Gravesend grammar school, who is battling to keep selection in Kent's grammar schools, said:
I wouldn't like to see selection by merit replaced by selection by purse.
That is one of the possible outcomes.
The hon. Member for Croydon, North talked about free school meals and gave us a sociological analysis. There could be no clearer division than the one that we face if those activists have their way because, if those schools become independent, the only people who will go to them are those who can afford to pay full fees. The Government are delivering educational opportunity for the few at the expense of educational opportunity for the many, as Labour Members might say.
When one looks at the picture and sees what the Government have done to take away opportunities, by abolishing the assisted places—[Interruption.]

Mr. Deputy Speaker (Mr. Michael J. Martin): Order. I appeal to hon. Members to calm down and listen to the hon. Gentleman. I also appeal to the hon. Gentleman to calm down.

Mr. Clappison: Labour Members are displaying the vigour with which they wish to abolish grammar schools.

That is how the Government pursue their ends—often by stealth, but always with vigour, but so that the Prime Minister can hold up his hands, say, "Not me, guv—it's all scaremongering," and give bland reassurances about the future. Meanwhile, his Back Benchers and his party outside Parliament work and campaign to undermine the promises he solemnly made to voters before the last general election.
When I look at what the Government have done to take away opportunity, especially from those who are less well-off, by abolishing assisted places and attacking grant-maintained schools and grammar schools, I have to ask, what is it that the Labour party has against the less well-off that it wants to take educational opportunities from them at every turn? This debate has highlighted the real threat that the Labour Government pose to choice, opportunity and diversity, with their almost Cromwellian determination to sweep across the country attacking any adornment or centre of excellence in the state education system.
I invite Ministers and Labour Back Benchers to think about the damage that they are doing to schools, the uncertainty that they are causing and the teachers and classroom assistants who might have to be made redundant. The Secretary of State boasted that the Government are making a difference, but, for all too many children in our schools, that difference is that they will receive an inferior education because of the Labour Government's policies.

The Minister for School Standards (Ms Estelle Morris): I congratulate the hon. Member for Hertsmere (Mr. Clappison) on his appointment to the Opposition Front Bench. In the past two years, there appears to have been rapid turnover in the shadow Education and Employment team. I think that this is the third team we have faced; let us hope, for their sake, that they do better than the previous two.
It would appear that one of the qualifications for appointment to the Opposition Front Bench is selective amnesia extending back over the 18 years of Tory rule. In his first speech as an education spokesman, the hon. Gentleman spent nigh on 15 minutes talking about two subjects, and two subjects only: grammar schools and grant-maintained schools. From their speeches today, I gather that the great thing that the Conservatives achieved during 18 years in office—the thing that they most want to defend, the thing that they most mind losing and the thing that, to them, encapsulates diversity—is their policy on grammar schools and grant-maintained schools. Let us see what they achieved with that policy.
The result of the Conservatives' policy on grammar schools was not a grammar school in every town or an expansion of grammar schools, but a steady contraction of grammar schools as the Tory years rolled on. When they left office, they left 160 grammar schools, compared with thousands when they took office in the 1970s. If grant-maintained schools were the second strand of their diverse education system, it amounted to only 1,000 schools. So what the Tories are celebrating today is having left a system that was meant to be diverse and was made up of two elements—160 grammar schools and 1,000 grant-maintained schools. All that after 18 years! If that is what the Tories come to the House today and talk


about with pride, with not one word about the 23,000 other schools that make up the English education system, it is not surprising that they lost the last election with such great force.
The Conservative Government fiddled with creating 1,000 grant-maintained schools and thought that that would solve the nation's problems, but they left the nation not an education system rich in diversity but one in which four out of 10 11-year-olds could not read and write properly; in which more than half of 16-year-olds could not achieve five or more higher grade GCSEs; in which 2.3 per cent. of schools were failing; and in which one in 10 schools had serious weaknesses and a third were not as good as they should have been. They left a £4 billion backlog of repairs and an expensive and wasteful nursery voucher scheme. They put a standstill on the expansion in higher education numbers. Schools had to cope with reduced budgets year after year under the Tory Government.
There was no system for dealing with failing LEAs. The Conservative Government had no levers to raise standards. That was what their vision of diversity brought about. That was what Tory diversity and choice was all about—a system that let down too many of the nation's children.

Mrs. May: The Minister has just said that there were no levers for raising standards under the previous Government. Does she accept that we introduced tests and the Office for Standards in Education? The Government are able to talk about standards in schools only because we introduced a rigorous inspection regime that publishes accountable statistics about the standards in schools.

Ms Morris: The hon. Lady talks about that, but the truth is that the Tory Government only did half the job. Tests and inspection reports reveal the problem. The real levers for raising standards are the action taken when the problems have been identified. In cases where inspection has revealed that a school is failing, we now have clear targets for improvement and options for action if it is not made. Where performance tables show a shortfall in the performance of schools, we have targets for improvement. There is monitoring, support, pressure and action where targets are not reached. Those are the levers for raising standards that are needed. It is not a case of letting someone else find the information and turning one's back on it. The Government must accept responsibility to use the levers for raising standards.

Mr. Clifton-Brown: Will the hon. Lady tell the House how she and her party voted on the introduction of Ofsted and the inspection of schools?

Ms Morris: I was not a Member of the House at that time so I did not cast a vote. The Labour party did not vote against Ofsted.
My hon. Friend the Member for Croydon, North (Mr. Wicks) was right when he said that as we approach the millennium the challenge for the educational system is that which it has never been before. The hon. Member for Bath (Mr. Foster) also intimated that. The challenge is not about raising standards for a few or sectioning off certain schools and giving them more funding. It is about raising standards for all children and making sure that every youngster who leaves school does so with the basic skills, committed to lifelong learning and with the

attitudes that will serve them well in adult life. That is the sort of choice and diversity that we have been acting on in the past two years. That is why we turned our back on the old, sterile arguments that were for the last century, not the next. That is why we have taken action to double the number of three-year-olds in nursery places and guarantee a place for all four-year-olds. We have introduced a sure start programme with £450 million. We have made sure that in 18 months' time there will be no five, six or seven-year-old in a class of more than 30.
We have put money into measures to reduce exclusion. We have made sure that every teacher will be trained to use information and communications technology, that every school will be connected to the national grid for learning and that we shall have a teaching force and school system that is kitted up to do the best that it can to meet the challenges of ICT.
The hon. Member for Bath was right. We wait for the Tories to adopt the new and pressing agenda for the nation. Not one word from the Opposition today gives me any confidence that, after two years in opposition, they have learned that lesson. The parents of this country want a Government who face the future and do not look back to the past. What we have heard today is a Conservative Opposition who harp on about arguments that they have lost. They lost with parents, they lost with teachers and, two years ago, they lost at the ballot box.
Conservative Members referred to the 160 grammar schools, and we will leave that matter to the parents. The Conservatives took action at central Government level to abolish more grammar schools than any other party did in a similar time scale.

Mr. Fabricant: Will the Minister give way?

Ms Morris: No, I am nearly out of time. Grant-maintained schools were about differential funding—not on the basis of the needs of children, but on the basis of the status and structure of schools. We have put that argument behind us.
The saddest thing was that, having failed to adopt the new agenda and having wasted three hours talking about grammar schools and grant-maintained schools while the rest of the world has moved on, the Conservatives could not even embrace the success of the literary and numeracy strategy. The hon. Member for Maidenhead quoted out-of-date figures and painted a picture of what teachers feared would happen at the start of the year. All the evidence from Ofsted, the National Foundation for Educational Research and teachers themselves shows that 90 per cent. of heads feel that it is a good system and 80 per cent. of teachers believe that it will raise standards.
I know that the hon. Member for Maidenhead does not believe the Ofsted evidence or the research from the NFER. What I know she likes is evidence quoted in teacher union magazines, so I shall quote from one of her favourite sources—the journal of the National Association of Schoolmasters/Union of Women Teachers. Adam Gibson, starting his third year at a new primary school in Derby, said of the literacy hour:
Most primary teachers feel the literacy framework is at worst a superb scheme of work and at best a genuine educational innovation.
I rest my case. Those words are not based on Government research. They are the words of the hon. Lady's tried and trusted friends—those who write in trade union journals.
The hon. Member for Hertsmere not only has a selective memory—he was ungracious in his comments. I was waiting for him to turn away from his sterile arguments of the past and to acknowledge that, in the past two years, we have spent £1.8 million to reduce class sizes in his constituency. In his own area, 2,500 fewer infant children are in classes of over 30. In his own area, there will be 102 extra teachers and nine new classrooms this September to deal with infant class sizes. In his area, £9 million is being put in for capital expenditure to repair schools.
If we throw in the constituencies of the hon. Members for Maidenhead and for Buckingham (Mr. Bercow), we find that 4,000 five, six and seven-year-olds are in smaller classes. Between the three constituencies, there are 35 extra classrooms and 200 extra teachers. Between them, they have £35 million capital to repair their schools. That is what two years of Labour has done for three Opposition constituencies. Multiply that many times over, and that shows the nature of the choice and diversity that we have created.
Our policy is not about separation or favouring the few, but about real choice for parents between excellent schools. Our policy on diversity means that parents have the option of out-of-school learning activities, and can choose schools on their strengths. However, the policy is not just about choice and diversity, but about standards. We will be judged by that and by nothing else. All the evidence shows that so far we are making good progress. Over the next few years we will see something happen that has never happened before: we will have an education service that is fit and ready for the next millennium.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 129, Noes 352.

Division No. 228]
[9.59 pm


AYES


Ainsworth, Peter (E Surrey)
Davis, Rt Hon David (Haltemprice)


Amess, David
Donaldson, Jeffrey


Ancram, Rt Hon Michael
Dorrell, Rt Hon Stephen


Arbuthnot, Rt Hon James
Duncan, Alan


Atkinson, Peter (Hexham)
Duncan Smith, Iain


Beggs, Roy
Evans, Nigel


Bell, Martin (Tatton)
Fabricant, Michael


Bercow, John
Fallon, Michael


Beresford, Sir Paul
Flight, Howard


Blunt, Crispin
Forth, Rt Hon Eric


Body, Sir Richard
Fowler, Rt Hon Sir Norman


Boswell, Tim
Fox, Dr Liam


Bottomley, Peter (Worthing W)
Fraser, Christopher


Bottomley, Rt Hon Mrs Virginia
Gale, Roger


Brazier, Julian
Garnier, Edward


Brooke, Rt Hon Peter
Gibb, Nick


Browning, Mrs Angela
Gill, Christopher


Bruce, Ian (S Dorset)
Gillan, Mrs Cheryl


Burns, Simon
Gorman, Mrs Teresa


Cash, William
Gray, James


Chope, Christopher
Green, Damian


Clappison, James
Grieve, Dominic


Clark, Dr Michael (Rayleigh)
Gummer, Rt Hon John


Clifton—Brown, Geoffrey
Hamilton, Rt Hon Sir Archie


Collins, Tim
Hammond, Philip


Colvin, Michael
Hawkins, Nick


Cormack, Sir Patrick
Heald, Oliver


Cran, James
Heathcoat—Amory, Rt Hon David





Heseltine, Rt Hon Michael
Robertson, Laurence (Tewk'b'ty)


Hogg, Rt Hon Douglas
Roe, Mrs Marion (Broxboume)


Horam, John
Ruffley, David


Howard, Rt Hon Michael
St Aubyn, Nick


Howarth, Gerald (Aldershot)
Sayeed, Jonathan


Jack, Rt Hon Michael
Shephard, Rt Hon Mrs Gillian


Jackson, Robert (Wantage)
Shepherd, Richard


Jenkin, Bernard
Soames, Nicholas


Key, Robert
Spelman, Mrs Caroline


Kirkbride, Miss Julie
Spicer, Sir Michael


Laing, Mrs Eleanor
Spring, Richard


Lansley, Andrew
Stanley, Rt Hon Sir John


Leigh, Edward
Steen, Anthony


Letwin, Oliver
Streeter, Gary


Lewis, Dr Julian (New Forest E)
Swayne, Desmond


Lidington, David
Syms, Robert


Lilley, Rt Hon Peter
Tapsell, Sir Peter


Lloyd, Rt Hon Sir Peter (Fareham)
Taylor, Ian (Esher & Walton)


Loughton, Tim
Taylor, John M (Solihull)


Luff, Peter
Taylor, Sir Teddy


MacGregor, Rt Hon John
Thompson, William


McIntosh, Miss Anne
Townend, John


MacKay, Rt Hon Andrew
Tredinnick, David


McLoughlin, Patrick
Trend, Michael


Malins, Humfrey
Tyrie, Andrew


Mates, Michael
Viggers, Peter


Maude, Rt Hon Francis
Wardle, Charles


May, Mrs Theresa
Wells, Bowen


Moss, Malcolm
Whittingdale, John


Nicholls, Patrick
Wilshire, David


Norman, Archie
Winterton, Mrs Ann (Congleton)


Ottaway, Richard
Winterton, Nicholas (Macclesfield)


Page, Richard
Woodward, Shaun


Paice, James
Yeo, Tim


Pickles, Eric
Young, Rt Hon Sir George


Prior, David



Randall, John
Tellers for the Ayes:


Redwood, Rt Hon John
Mr. Keith Simpson and


Robathan, Andrew
Mrs. Jacqui Lait.


NOES


Abbott, Ms Diane
Bradley, Peter (The Wrekin)


Ainger, Nick
Bradshaw, Ben


Ainsworth, Robert (Cov'try NE)
Brake, Tom


Alexander, Douglas
Breed, Colin


Allan, Richard
Brinton, Mrs Helen


Allen, Graham
Brown, Rt Hon Nick (Newcastle E)


Anderson, Janet (Rossendale)
Brown, Russell (Dumfries)


Armstrong, Rt Hon Ms Hilary
Browne, Desmond


Ashton, Joe
Buck, Ms Karen


Atherton, Ms Candy
Burden, Richard


Atkins, Charlotte
Burgon, Cohn


Austin, John
Burnett, John


Baker, Norman
Burstow, Paul


Barnes, Harry
Butler, Mrs Christine


Barron, Kevin
Byers, Rt Hon Stephen


Battle, John
Caborn, Rt Hon Richard


Bayley, Hugh
Campbell, Mrs Anne (C'bridge)


Beard, Nigel
Campbell, Ronnie (Blyth V)


Beckett, Rt Hon Mrs Margaret
Campbell—Savours, Dale


Begg, Miss Anne
Cann, Jamie


Beith, Rt Hon A J
Caplin, Ivor


Bell, Stuart (Middlesbrough)
Casale, Roger


Benn, Hilary (Leeds C)
Caton, Martin


Benn, Rt Hon Tony (Chesterfield)
Cawsey, Ian


Bennett, Andrew F
Chapman, Ben (Wirral S)


Benton, Joe
Chisholm, Malcolm


Bermingham, Gerald
Clapham, Michael


Berry, Roger
Clark, Rt Hon Dr David (S Shields)


Best, Harold
Clark, Dr Lynda (Edinburgh Pentlands)


Betts, Clive
Clark, Paul (Gillingham)


Blackman, Liz
Clarke, Charles (Norwich S)


Blears, Ms Hazel
Clarke, Rt Hon Tom (Coatbridge)


Blizzard, Bob
Clarke, Tony (Northampton S)


Blunkett, Rt Hon David
Clelland, David


Boateng, Paul







Coaker, Vernon
Healey, John


Coffey, Ms Ann
Henderson, Ivan (Harwich)


Coleman, Iain
Hepburn, Stephen


Colman, Tony
Hesford, Stephen


Connarty, Michael
Hinchliffe, David


Corbett, Robin
Hood, Jimmy


Corbyn, Jeremy
Hope, Phil


Cotter, Brian
Hopkins, Kelvin


Cousins, Jim
Howarth, Alan (Newport E)


Cranston, Ross
Howarth, George (Knowsley N)


Cryer, Mrs Ann (Keighley)
Howells, Dr Kim


Cryer, John (Hornchurch)
Hoyle, Lindsay


Cummings, John
Hughes, Ms Beverley (Stretford)


Cunliffe, Lawrence
Hughes, Kevin (Doncaster N)


Curtis—Thomas, Mrs Claire
Humble, Mrs Joan


Dafis, Cynog
Hurst, Alan


Davey, Valerie (Bristol W)
Hutton, John


Davies, Rt Hon Denzil (Llanelli)
Iddon, Dr Brian


Davies, Geraint (Croydon C)
Illsley, Eric


Davis, Terry (B'ham Hodge H)
Jackson, Ms Glenda (Hampstead)


Dawson, Hilton
Jackson, Helen (Hillsborough)


Dean, Mrs Janet
Jenkins, Brian


Denham, John
Johnson, Alan (Hull W & Hessle)


Dobbin, Jim
Johnson, Miss Melanie (Welwyn Hatfield)


Dobson, Rt Hon Frank
Jones, Rt Hon Barry (Alyn)


Donohoe, Brian H
Jones, Mrs Fiona (Newark)


Doran, Frank
Jones, Helen (Warrington N)


Dowd, Jim
Jones, Ms Jenny (Wolverh'ton SW)


Drew, David
Jones, Jon Owen (Cardiff C)


Drown, Ms Julia
Jones, Dr Lynne (Selly Oak)


Dunwoody, Mrs Gwyneth
Jones, Martyn (Clwyd S)


Eagle, Angela (Wallasey)
Kaufman, Rt Hon Gerald


Eagle, Maria (L'pool Garston)
Keeble, Ms Sally


Edwards, Huw
Keen, Alan (Feltham & Heston)


Efford, Clive
Keen, Ann (Brentford & Isleworth)


Ellman, Mrs Louise
Keetch, Paul


Ennis, Jeff
Kemp, Fraser


Etherington, Bill
Kennedy, Jane (Wavertree)


Fearn, Ronnie
Kidney, David


Fisher, Mark
Kilfoyle, Peter


Fitzpatrick, Jim
King, Andy (Rugby & Kenilworth)


Fitzsimons, Lorna
Kumar, Dr Ashok


Flint, Caroline
Ladyman, Dr Stephen


Flynn, Paul
Lawrence, Ms Jackie


Follett, Barbara
Laxton, Bob


Foster, Rt Hon Derek
Lepper, David


Foster, Don (Bath)
Leslie, Christopher


Foster, Michael Jabez (Hastings)
Levitt, Tom


Foster, Michael J (Worcester)
Lewis, Ivan (Bury S)


Fyfe, Maria
Lewis, Terry (Worsley)


Galloway, George
Liddell, Rt Hon Mrs Helen


Gapes, Mike
Linton, Martin


Gardiner, Barry
Livingstone, Ken


George, Andrew (St Ives)
Livsey, Richard


Gerrard, Neil
Llwyd, Elfyn


Gibson, Dr Ian
Lock, David


Gilroy, Mrs Linda
Love, Andrew


Godman, Dr Norman A
McAllion, John


Godsiff, Roger
McAvoy, Thomas


Goggins, Paul
McCabe, Steve


Gordon, Mrs Eileen
McCafferty, Ms Chris


Gorrie, Donald
McCartney, Rt Hon Ian (Makerfield)


Griffiths, Jane (Reading E)
Macdonald, Calum


Griffiths, Nigel (Edinburgh S)
McDonnell, John


Griffiths, Win (Bridgend)
Mclsaac, Shona


Grocott, Bruce
McKenna, Mrs Rosemary


Grogan, John
McNulty, Tony


Gunnell, John
MacShane, Denis


Hall, Mike (Weaver Vale)
Mactaggart, Fiona


Hall, Patrick (Bedford)
McWalter, Tony


Hamilton, Fabian (Leeds NE)
McWilliam, John


Hancock, Mike
Mahon, Mrs Alice


Hanson, David
Mendelson, Rt Hon Peter


Harman, Rt Hon Ms Harriet



Harvey, Nick



Heal, Mrs Sylvia






Marsden, Gordon (Blackpool S)
Short, Rt Hon Clare


Marsden, Paul (Shrewsbury)
Simpson, Alan (Nottingham S)


Marshall, David (Shettleston)
Singh, Marsha


Marshall, Jim (Leicester S)
Skinner, Dennis


Marshall—Andrews, Robert
Smith, Rt Hon Andrew (Oxford E)


Martlew, Eric
Smith, Angela (Basildon)


Meacher, Rt Hon Michael
Smith, Rt Hon Chris (Islington S)


Meale, Alan
Smith, Miss Geraldine (Morecambe & Lunesdale)


Merron, Gillian
Smith, Jacqui (Redditch)


Michael, Rt Hon Alun
Smith, Llew (Blaenau Gwent)


Michie, Bill (Shef'ld Heeley)
Smith, Sir Robert (W Ab'd'ns)


Milbum, Rt Hon Alan
Soley, Clive


Mitchell, Austin
Southworth, Ms Helen


Moffatt, Laura
Speller, John


Moonie, Dr Lewis
Squire, Ms Rachel


Moore, Michael
Starkey, Dr Phyllis


Moran, Ms Margaret
Steinberg, Gerry


Morgan, Ms Julie (Cardiff N)
Stevenson, George


Morley, Elliot
Stewart, David (Inverness E)


Morris, Ms Estelle (B'ham Yardley)
Stewart, Ian (Eccles)


Mudie, George
Stoate, Dr Howard


Mullin, Chris
Stott, Roger


Murphy, Denis (Wansbeck)
Stringer, Graham


Murphy, Jim (Eastwood)
Stuart, Ms Gisela


Naysmith, Dr Doug
Stunell, Andrew


O'Brien, Bill (Normanton)
Sutcliffe, Gerry


O'Brien, Mike (N Warks)
Taylor, Rt Hon Mrs Ann (Dewsbury)


O'Hara, Eddie
Taylor, Ms Dart (Stockton S)


Olner, Bill
Taylor, David (NW Leics)


O'Neill, Martin
Thomas, Gareth (Clwyd W)


Öpik, Lembit
Thomas, Gareth R (Harrow W)


Organ, Mrs Diana
Timms, Stephen


Osbo Osborne, Ms Sandra
Tipping, Paddy


Palmer, Dr Nick
Todd, Mark


Pendry, Tom Pend
Touhig, Don


Pickthall, Colin
Trickett, Jon


Pike, Peter L
Turner, Dennis (Wolverh'ton SE)


Plaskitt, James
Turner, Dr Desmond (Kemptown)


Pollard, Kerry
Turner, Dr George (NW Norfolk)


Pond, Chris
Twigg, Derek (Halton)


Pope, Greg
Twigg, Stephen (Enfield)


Pound, Stephen
Tyler, Paul


Powell Sir Raymond
Vaz, Keith


Prentice, Ms Bridget (Lewisham E)
Vis, Dr Rudi


Prentice, Gordon (Pendle)
Walley, Ms Joan


Prescott, Rt Hon John
Wareing, Robert N


Prosser, Gwyn 
Watta, David


Purchase, Ken
Webb, Steve


Quin, Rt Hon Ms Joyce
White, Brian


Radice, Rt Hon Giles
Whitehead, Dr Alan


Rammell, Bill
Wicks, Malcolm


Raynsford, Nick
Williams, Rt Hon Alan (Swansea W)


Reed, Andrew (Loughborough)
Williams, Alan W (E Carmarthen)


Reid, Rt Hon Dr John (Hamilton N)
Williams, Mrs Betty (Conwy)


Roche, Mrs Barbara
Willis, Phil


Rooker, Jeff
Winnick, David


Rooney, Terry
Winterton, Ms Rosie (Doncaster C)


Rowlands, Ted
Wise, Audrey


Roy, Frank
Wood, Mike


Ruddock, Joan
Woolas, Phil


Russell, Bob (Colchester)
Worthington, Tony


Russell, Ms Christine (Chester)
Wray, James


Salter, Martin
Wright, Anthony D (Gt Yarmouth)


Sanders, Adrian
Wright, Dr Tony (Cannock)


Savidge, Malcolm



Sawford, Phil
Tellers for the Noes:


Sedgemore, Brian
Mr. Keith Hill and


Shaw, Jonathan
Mrs. Anne McGuire.


Sheerman, Barry



Sheldon, Rt Hon Robert

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments):—

The House divided: Ayes 321, Noes 149.

Division No. 229]
[10.17 pm


AYES


Abbott, Ms Diane
Cranston, Ross


Ainger, Nick
Cryer, Mrs Ann (Keighley)


Ainsworth, Robert (Cov'try NE)
Cryer, John (Hornchurch)


Alexander, Douglas
Cummings, John


Allen, Graham
Cunliffe, Lawrence


Anderson, Janet (Rossendale)
Curtis—Thomas, Mrs Claire


Armstrong, Rt Hon Ms Hilary
Davey, Valerie (Bristol W)


Ashton, Joe
Davies, Rt Hon Denzil (Llanelli)


Atherton, Ms Candy
Davies, Geraint (Croydon C)


Atkins, Charlotte
Davis, Terry (B'ham Hodge H)


Austin, John
Dawson, Hilton


Barnes, Harry
Dean, Mrs Janet


Barron, Kevin
Denham, John


Battle, John
Dobbin, Jim


Bayley, Hugh
Dobson, Rt Hon Frank


Beard, Nigel
Donohoe, Brian H


Beckett, Rt Hon Mrs Margaret
Doran, Frank


Begg, Miss Anne
Dowd, Jim


Bell, Stuart (Middlesbrough)
Drew, David


Benn, Hilary (Leeds C)
Drown, Ms Julia


Benn, Rt Hon Tony (Chesterfield)
Eagle, Angela (Wallasey)


Bennett, Andrew F
Eagle, Maria (L'pool Garston)


Benton, Joe
Efford, Clive


Bermingham, Gerald
Ellman, Mrs Louise


Berry, Roger
Ennis, Jeff


Best, Harold
Etherington, Bill


Betts, Clive
Fisher, Mark


Blackman, Liz
Fitzpatrick, Jim


Blears, Ms Hazel
Fitzsimons, Lorna


Blizzard, Bob
Flint, Caroline


Blunkett, Rt Hon David
Flynn, Paul


Boateng, Paul
Follett, Barbara


Bradley, Peter (The Wrekin)
Foster, Rt Hon Derek


Bradshaw, Ben
Foster, Michael Jabez (Hastings)


Brinton, Mrs Helen
Foster, Michael J (Worcester)


Brown, Rt Hon Nick (Newcastle E)
Fyfe, Maria


Brown, Russell (Dumfries)
Galloway, George


Browne, Desmond
Gapes, Mike


Buck, Ms Karen
Gardiner, Barry


Burden, Richard
Gerrard, Neil


Burgon, Colin
Gibson, Dr Ian


Butler, Mrs Christine
Gilroy, Mrs Linda


Byers, Rt Hon Stephen
Godman, Dr Norman A


Caborn, Rt Hon Richard
Godsiff, Roger


Campbell, Mrs Anne (C'bridge)
Goggins, Paul


Campbell, Ronnie (Blyth V)
Gordon, Mrs Eileen


Campbell—Savours, Dale
Griffiths, Jane (Reading E)


Cann, Jamie
Griffiths, Nigel (Edinburgh S)


Caplin, Ivor
Griffiths, Win (Bridgend)


Casale, Roger
Grocott, Bruce


Caton, Martin
Grogan, John


Cawsey, Ian
Gunnell, John


Chapman, Ben (Wirral S)
Hall, Mike (Weaver Vale)


Chisholm, Malcolm
Hall, Patrick (Bedford)


Clapham, Michael
Hamilton, Fabian (Leeds NE)


Clark, Rt Hon Dr David (S Shields)
Hanson, David


Clark, Dr Lynda (Edinburgh Pentlands)
Harman, Rt Hon Ms Harriet


Clark, Paul (Gillingham)
Heal, Mrs Sylvia


Clarke, Charles (Norwich S)
Healey, John


Clarke, Rt Hon Tom (Coatbridge)
Henderson, Ivan (Harwich)


Clarke, Tony (Northampton S)
Hepburn, Stephen


Clelland, David
Hesford, Stephen


Coaker, Vernon
Hinchliffe, David


Coffey, Ms Ann
Hood, Jimmy


Coleman, Iain
Hope, Phil


Colman, Tony
Hopkins, Kelvin


Connarty, Michael
Howarth, Alan (Newport E)


Corbett, Robin
Howarth, George (Knowsley N)


Corbyn, Jeremy
Howells, Dr Kim


Cousins, Jim
Hoyle, Lindsay



Hughes, Ms Beverley (Stretford)





Hughes, Kevin (Doncaster N)
Morgan, Ms Julie (Cardiff N)


Humble, Mrs Joan
Morley, Elliot


Hurst, Alan
Morris, Ms Estelle (B'ham Yardley)


Hutton, John
Mudie, George


Iddon, Dr Brian
Mullin, Chris


Illsley, Eric
Murphy, Denis (Wansbeck)


Jackson, Ms Glenda (Hampstead)
Murphy, Jim (Eastwood)


Jackson, Helen (Hillsborough)
Naysmith, Dr Doug


Jenkins, Brian
O'Brien, Bill (Normanton)


Johnson, Alan (Hull W & Hessle)
O'Brien, Mike (N Warks)


Johnson, Miss Melanie (Welwyn Hatfield)
O'Hara, Eddie


Jones, Rt Hon Barry (Alyn)
Olner, Bill


Jones, Mrs Fiona (Newark)
O'Neill, Martin


Jones, Helen (Warrington N)
Organ, Mrs Diana


Jones, Ms Jenny (Wolverh'ton SW)
Osbome, Ms Sandra


Jones, Jon Owen (Cardiff C)
Palmer, Dr Nick


Jones, Dr Lynne (Selly Oak)
Pendry, Tom


Jones, Marlyn (Clwyd S)
Pickthall, Colin


Kaufman, Rt Hon Gerald
Pike, Peter L


Keeble, Ms Sally
Plaskitt, James


Keen, Alan (Feltham & Heston)
Pollard, Kerry


Keen, Ann (Brentford & Isleworth)
Pond, Chris


Kemp, Fraser
Pope, Greg


Kennedy, Jane (Wavertree)
Pound, Stephen


Kidney, David
Prentice, Ms Bridget (Lewisham E)


Kilfoyle, Peter
Prentice, Gordon (Pendle)


King, Andy (Rugby & Kenilworth)
Prescott, Rt Hon John


Kumar, Dr Ashok
Prosser, Gwyn


Ladyman, Dr Stephen
Purchase, Ken


Lawrence, Ms Jackie
Quin, Rt Hon Ms Joyce


Laxton, Bob
Radice, Rt Hon Giles


Lepper, David
Rammell, Bill


Leslie, Christopher
Raynsford, Nick


Levitt, Tom
Reed, Andrew (Loughborough)


Lewis, Ivan (Bury S)
Reid, Rt Hon Dr John (Hamilton N)


Lewis, Terry (Worsley)
Roche, Mrs Barbara


Liddell, Rt Hon Mrs Helen
Rooker, Jeff


Linton, Martin
Rooney, Terry


Livingstone, Ken
Rowlands, Ted


Lock, David
Roy, Frank


Love, Andrew
Ruddock, Joan


McAllion, John
Russell, Ms Christine (Chester)


McAvoy, Thomas
Salter, Martin


McCabe, Steve
Savidge, Malcolm


McCafferty, Ms Chris
Sawford, Phil


McCartney, Rt Hon Ian (Makerfield)
Sedgemore, Brian


Macdonald, Calum
Shaw, Jonathan


McDonnell, John
Sheerman, Barry


Mclsaac, Shona
Sheldon, Rt Hon Robert


McKenna, Mrs Rosemary
Short, Rt Hon Clare


McNulty, Tony
Simpson, Alan (Nottingham S)


MacShane, Denis
Singh, Marsha


Mactaggart, Fiona
Skinner, Dennis


McWatter, Tony
Smith, Rt Hon Andrew (Oxford E)


McWilliam, John
Smith, Angela (Basildon)


Mahon, Mrs Alice
Smith, Rt Hon Chris (Islington S)


Mandelson, Rt Hon Peter
Smith, Miss Geraldine (Morecambe & Lunesdale)


Marsden, Gordon (Blackpool S)
Smith, Jacqui (Redditch)


Marsden, Paul (Shrewsbury)
Smith, Llew (Blaenau Gwent)


Marshall, David (Shettleston)
Soley, Clive


Marshall, Jim (Leicester S)
Southworth, Ms Helen


Marshall—Andrews, Robert
Spellar, John


Martlew, Eric
Squire, Ms Rachel


Meacher, Rt Hon Michael
Starkey, Dr Phyllis


Meale, Alan
Steinberg, Gerry


Merron, Gillian
Stevenson, George


Michael, Rt Hon Alun
Stewart, David (Inverness E)


Michie, Bill (Shef'ld Heeley)
Stewart, Ian (Eccles)


Milburn, Rt Hon Alan
Stoate, Dr Howard


Mitchell, Austin
Stringer, Graham


Moffatt, Laura
Stuart, Ms Gisela


Moonie, Dr Lewis
Sutcliffe, Gerry


Moran, Ms Margaret
Taylor, Rt Hon Mrs Ann (Dewsbury)



Taylor, Ms Dail (Stockton S)






Taylor, David (NW Leics)
Whitehead, Dr Alan


Thomas, Gareth (Clwyd W)
Wicks, Malcolm


Thomas, Gareth R (Harrow W)
Williams, Rt Hon Alan (Swansea W)


Timms, Stephen
Williams, Alan W (E Carmarthen)


Tipping, Paddy
Williams, Mrs Betty (Conwy)


Todd, Mark
Winnick, David


Touhig, Don
Winterton, Ms Rosie (Doncaster C)


Trickett, Jon
Wise, Audrey


Turner, Dennis (Wolverh'ton SE)
Woodla Mike


Turner, Dr Desmond (Kemptown)
Woolas, Phil


Turner, Dr George (NW Norfolk)
Worthington, Tony


Twigg, Derek (Halton)
Wray, James


Twigg, Stephen (Enfield)
Wright, Anthony D (Gt Yarmouth)


Vaz, Keith
Wright, Dr Tony (Cannock)


Vis, Dr Rudi



Walley, Ms Joan
Tellers for the Ayes:


Wareing, Robert N
Mrs. Anne McGuire and


Watts, David
Mr. Keith Hill.


NOES


Ainsworth, Peter (E Surrey)
Fox, Dr Liam


Allan, Richard
Fraser, Christopher


Amess, David
Gale, Roger


Ancram, Rt Hon Michael
Gamier, Edward


Arbuthnot, Rt Hon James
George, Andrew (St Ives)


Atkinson, Peter (Hexham)
Gibb, Nick


Baker, Norman
Gill, Christopher


Beggs, Roy
Gillan, Mrs Cheryl


Beith, Rt Hon A J
Gorman, Mrs Teresa


Bercow, John
Gorrie, Donald


Beresford, Sir Paul
Gray, James


Blunt, Crispin
Green, Damian


Body, Sir Richard
Grieve, Dominic


Boswell, Tim
Gummer, Rt Hon John


Bottomley, Peter (Worthing W)
Hamilton, Rt Hon Sir Archie


Bottomley, Rt Hon Mrs Virginia
Hammond, Philip


Brake, Tom
Hancock, Mike


Brazier, Julian
Harvey, Nick


Breed, Colin
Hawkins, Nick


Brooke, Rt Hon Peter
Heald, Oliver


Browning, Mrs Angela
Heathcoat—Amory, Rt Hon David


Bruce, Ian (S Dorset)
Heseltine, Rt Hon Michael


Burnett, John
Hogg, Rt Hon Douglas


Burns, Simon
Horam, John


Burstow, Paul
Howard, Rt Hon Michael


Cash, William
Howarth, Gerald (Aldershot)


Chope, Christopher
Jack, Rt Hon Michael


Clappison, James
Jackson, Robert (Wantage)


Clark, Dr Michael (Rayleigh)
Jenkin, Bernard


Clifton—Brown, Geoffrey
Keetch, Paul


Collins, Tim
Key, Robert


Cormack, Sir Patrick
Kirkbride, Miss Julie


Cotter, Brian
Laing, Mrs Eleanor


Cran, James
Lansley, Andrew


Dafis, Cynog
Leigh, Edward


Davis, Rt Hon David (Haltemprice)
Letwin, Oliver


Donaldson, Jeffrey
Lewis, Dr Julian (New Forest E)


Dorrell, Rt Hon Stephen
Lidington, David


Duncan, Alan
Lilley, Rt Hon Peter


Duncan Smith, Iain
Livsey, Richard


Evans, Nigel
Lloyd, Rt Hon Sir Peter (Fareham,)


Fabricant, Michael
Llwyd, Elfyn


Fallon, Michael
Loughton, Tim


Fearn, Ronnie
Luff, Peter


Flight, Howard
MacGregor, Rt Hon John


Forth, Rt Hon Eric
McIntosh, Miss Anne


Foster, Don (Bath)
MacKay, Rt Hon Andrew


Fowler, Rt Hon Sir Norman
McLoughlin, Patrick





Malins, Humfrey
Spicer, Sir Michael


Mates, Michael
Spring, Richard


Maude, Rt Hon Francis
Stanley, Rt Hon Sir John


May, Mrs Theresa
Stunell, Andrew


Moore, Michael
Swayne, Desmond


Nicholls, Patrick
Syms, Robert


Norman, Archie
Tapsell, Sir Peter


Öpik, Lembit
Taylor, Ian (Esher & Walton)


Ottaway, Richard
Taylor, John M (Solihull)


Page, Richard 
Taylor, Sir Teddy


Paice, James
Thompson, William


Pickles Eric,Prior David
Tredinnick, David


Randall, John
Trend, Michael


Redwood, Rt Hon John
Tyler, Paul


Robathan, Andrew
Tyrie, Andrew 


Robertson, Laurence (Tewkb'ty)
Wardle, Charles


Roe, Mrs Marion (Broxbourne)
Webb, Steve


Ruffley, David
Whittingdale, John


Russell, Bob (Colchester)
Willis, Phil


St Aubyn, Nick
Wilshire, David


Sanders, Adrian
Winterton, Mrs Ann (Congleton)


Sayeed, Jonathan
Winterton, Nicholas (Macclesfield)


Shephard, Rt Hon Mrs Gillian
Woodward, Shaun


Shepherd, Richard
Yeo, Tim


Smith, Sir Robert (W Ab'd'ns)
Young, Rt Hon Sir George


Soames, Nicholas



Spelman, Mrs Caroline
Tellers for the Noes:



Mrs. Jacqui Lait and



Mr. Keith Simpson.

Question accordingly agreed to.

MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,
That this House welcomes the Government's success in cutting infant class sizes after 10 years of rising class sizes and the successful introduction of the literacy hour, which is restoring phonics, spelling and grammar to the primary school curriculum; notes the plans to extend daily numeracy lessons nationwide from September, which will place strong emphasis on mental arithmetic; recognises the Government's strong commitment to diversity through the rapid expansion of specialist schools and beacon schools; welcomes the success to date of the Government's policy in support of failing schools; supports the considerable work already undertaken to reduce bureaucracy in schools following years of neglect; supports the Government's new code of practice on school admissions; welcomes the new White Paper on reform of post-16 education and the clear guarantees it offers on sixth form funding; supports the Government's plans to reward good teaching; and believes that the extra £19 billion allocated to education is beginning to make a real difference to the money available to schools, not least in tackling the substantial repairs and maintenance backlog.

DELEGATED LEGISLATION

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

CIVIL AVIATION

That the draft Stansted Airport Aircraft Movement Limit (Amendment) Order 1999, which was laid before this House on 16th June, be approved.—[Mr. Mike Hall.]

Question agreed to.

Preston Guild Community Health Trust

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Mike Hall.]

Audrey Wise: In 1990 the then Preston health authority appointed Mr. Les Howell as general manager. He is now suspended and has been informed that his contract has been terminated. The purpose of tonight's debate is to examine that situation and relate it to wider concerns about mental health and community services in Preston.
When Mr. Howell was appointed, his remit was to merge two directly managed units—one covering mental health and the other dealing with community services—that would together form the priority services unit. The previous general manager of the mental health services had been dismissed and the services provided were variable to poor, except for those covering learning disabilities, which were good. Mental health services were in a disgraceful condition.
The trouble had been long standing. In 1972, there was a major statutory inquiry—the Payne inquiry—into Whittingham mental hospital. The report showed abuses and ill-treatment of patients. One patient died as a result of ill-treatment.
On taking over in 1990, it appeared to Mr. Howell that little had changed. As always, some staff were doing their level best, but in general the standards at Whittingham hospital were appalling. For example, toilets on the corridors were locked to stop patients accessing them. Sexual abuse of patients was discovered, a senior psychologist was dismissed and a charge nurse was sent to prison for two years for having unlawful intercourse with a patient. Pornography was found, and attempted suicides were frequent and sometimes successful. In one case a 16-year-old girl was found hanging from a shower rail.
In 30 years in the national health service the new general manager, Mr. Howell, had never experienced such a bad situation and seriously considered leaving six months after his appointment. However, he stuck it out, successfully integrated two management teams and created the new combined unit and later the Preston Guild community trust.
The closure of Whittingham hospital was successfully managed. It included negotiations with 46 other organisations to achieve the successful transfer of patients and resources. The closure programme was agreed at 36 months and delivered on time with only 18 compulsory redundancies, although 760 staff had been declared at risk.
Although hospitals such as Whittingham certainly needed to be closed, there are many unresolved issues. In the case of Whittingham, unusually, local people supported the existence of mental health facilities on the site. Mr. Howell proposed developing the site into a health park that would provide a comprehensive range of mental health services such as forensic services including high security, also palliative care, and a range of holiday and respite facilities for mentally and physically disordered people.
The idea was presented to the regional chief executive, Professor Tinston, received politely, and deferred. Mr. Howell formed the view that it was not favoured.

That may be because it is preferred that the site should be sold for housing development, which is very much against the local community's wishes and will not help to meet any of the clear needs for improved facilities for mental health services. I would much prefer an imaginative idea such as Mr. Howell's, and I regard it as characteristic of the man that he was working on such a proposal.
My hon. Friend the Minister suggested to me that the trust should
build on its past record".—[Official Report, 8 June 1999; Vol. 332, c. 460.]
That implies that there is a record worth building on; and there is. The Guild trust has a unique facility for the care of patients with advanced Huntington's disease, which is a genetically carried severe degenerative disease—one of the most distressing diseases that there is. Frank Gardham house is the only dedicated facility in the country; the only other one in the world is in Melbourne, Australia.
It is generally acknowledged that the inspiration for Frank Gardham house came from Mr. Howell. It was designed and developed and is managed jointly with carers. Last August, my right hon. Friend the Secretary of State for Health presented Mr. Howell with a special NHS 50th anniversary award to the trust for Frank Gardham house. The only problems are that it should be replicated elsewhere and that North West Lancashire health authority should fund more beds for local people. Current funding allows for only three or four people from our area.
As the local Member of Parliament, I am painfully aware that that is insufficient. As with all genetic diseases, there can be area clusters, and Preston is such an area for Huntington's disease. Unfortunately, the health authority does not share the view of the NHS or the Secretary of State about Frank Gardham house and I have had to raise questions about funding and provision for my constituents that have not, in my view, been dealt with satisfactorily.
I am sorry to say that the situation has worsened since Mr. Howell's suspension last autumn. Indeed, I have since been informed by the health authority that
The Authority has consistently maintained that, as far as possible, services for people with this condition should be provided in the community.
In 1995, I made representations about the need to admit a patient with Huntington's who was living in a night shelter. I have copies of correspondence that show a complete lack of understanding by North West Lancashire health authority of the needs of patients with Huntington's. There was even a claim that their needs could be met by a social care package from social services.
There was considerable unwillingness to pay for a suitable service. In a letter to me, the chief executive, Mr. David Edmondson, simply passed the buck to the Guild and blamed it for failure to admit the patient. He did not tell me that the Guild had already raised the patient's plight, nor did he then make it clear that the health authority really did not like paying for the provision and would prefer it to end.
I now understand from both the acting chief executive of the Guild and North West Lancashire health authority that the Guild is reviewing its range of provision
with a view to moving towards a more community based service in the future, thus reducing the need for residential places.


Frank Gardham house is a small specialist unit with deeply involved carers. In my view, it is part of the community; but of course it costs more than care in the patient's home or a nursing home.
I have already informed my right hon. Friend the Secretary of State that I intend to fight hard for the maintenance of the service. I consider that Mr. Howell's removal was seen as an opportunity to worsen the service. One of the criticisms levelled at Mr. Howell is that he has a bad relationship with Mr. Edmondson. I strongly suspect that that may be connected with Mr. Howell's propensity to want more funding for services such as Frank Gardham house, arising from his passionate concern for patients.
The Preston area contains many people from minority ethnic communities. Under Mr. Howell's leadership, very good relationships have been built with those communities. Projects include jointly organising workshops and local conferences sponsored by the Guild trust. They have helped local communities express their views on how to make services more accessible and appropriate for their cultures. Projects have included mental health, women's issues and services for children, and the results have been recorded in various languages and reported back to the communities. That is why there is such support for Mr. Howell among the ethnic minorities.
Last September, a national conference on health care for minority ethnic groups was organised by the Guild trust, with the co-operation of six other trusts, and three universities and colleges. Unfortunately, the appropriate health authorities, including North West Lancashire, declined to take part.
Apart from a conference organised by the Department in 1997, that was the first national conference on the issue. Having participated, I can vouch for its resounding success. It was informative, constructive and thought provoking at every level. It involved both professional and lay people from all communities in the UK, and it crossed the health and social services divide which, as my hon. Friend the Minister knows, is usually all too wide.
I do not believe that that conference would have taken place without Mr. Howell's inspiration and guidance. It was intended to be the first step towards setting up an institute of minority communities health and social care, but I have not observed any progress towards that aim since his suspension.

Mr. Nigel Evans: Will the hon. Lady give way?

Audrey Wise: No. The hon. Gentleman had an Adjournment debate a few weeks ago, and should be satisfied with that.
Since Mr. Howell's suspension, I have received many expressions of support for him from all sections of the minority communities in Preston and throughout Lancashire. I have also received expressions of support for him from carers of trust patients.
One of those who wanted to get rid of Mr. Howell described him as
very clever, imaginative and passionate about the Health Service.
That is quite a good reference from an opponent. However, a person who brings single-minded commitment to his job, which entails sorting out problems such as I have outlined, is apt to make enemies, and Les Howell has clearly done that.
Now the opportunity has been taken to get rid of him. How did that opportunity arise? As is not uncommon in organisations dealing with mentally disturbed patients, incidents have taken place that have sparked concern and inquiries.
Two such incidents occurred in 1996. The first involved two patients, Julie Byelong and her husband Douglas. Douglas Byelong was on conditional discharge by order of the Secretary of State, the condition being that he lived in his flat, which he failed to do. Julie Byelong absconded on unsupervised leave granted as part of a medical decision. They committed the serious offences of attempted murder and kidnap. Both had been patients at the Langdale unit, a medium-secure forensic unit for Lancashire and south Cumbria. The majority of its patients are detained under the Mental Health Act 1983, and most suffer from severe mental illness.
A detailed report into the matter states:
The service has been historically under resourced.
I regard that as a very significant statement. Various recommendations were made and were being progressed according to plan, but it seems to me that problems of under-resourcing almost certainly persist.
The second incident involved a discharged patient, Daniel Holden, who later committed murder. The court found that he was not mentally ill at the time of the murder. It was agreed—by the court and by a subsequent inquiry—that the trust bore no responsibility for the fact that he committed murder. However, the inquiry found that there were deficiencies in the care that he had received in the community while a patient, and made some recommendations about that. Surprisingly, it also imported into the report some strong criticisms of the chief executive. I have analysed the report carefully, and those criticisms do not seem to me to be properly justified by the report's factual findings.
Mr. Howell took exception to the report, and made what I consider to be a mistake in the way that he handled it. That gave his opponents an opportunity, and they took full advantage of it.
Mr. Howell replied to the draft Holden report before he consulted the board, although he did consult the then chairman. Mr. Howell's reply was a defence of the trust as well as of himself. It was understandable and probably justified, but it was a lapse of judgment to send it before consulting the board. The chair, Mrs. Diamond, was then pressured into suspending him on threat of a vote of no confidence in herself as well.
The Galbraith inquiry was then set up. Mr. Howell had understood that his suspension was without prejudice and he was in favour of an inquiry. However, the inquiry panel interpreted its terms of reference as meaning that it should set aside all issues of Mr. Howell's achievements and consider only whether there had been a loss of confidence in him.
Every other inquiry had given lists of those who gave evidence and had made detailed reference to factual matters and documents. The Galbraith inquiry did not disclose who gave evidence, nor any documentary back-up, nor the basis on which it decided whom to interview and whom to refuse to interview. Having confidence in Mr. Howell was given no weight, but losing confidence in him carried great weight.
The then trust chair is heavily criticised for having too much confidence in the chief executive. Insinuations are made about the capability of the then human resources


director, who has now successfully obtained a position with another trust, but who also had, apparently, the fatal flaw of having confidence in the chief executive.
Two non-executive directors, Mr. Nelson and Mr. Mallidi, had been very reluctant about the suspension in the first place, but three non-executive directors had favoured it. Therefore, the margin was not exactly huge, but the impression has been given that no one had any confidence in the chief executive and that he was unable to work with other people.
Some staff were critical. I have discussed that with some of them, but they did say to me that Guild trust services were second to none and far better than others in Lancashire, and that they had a staff training system that was also second to none. However, they apparently gave the chief executive none of the credit for that of which they approved, and all the blame for what they did not like. Most of what they did not like appeared to result from changes in the NHS through the establishment of trusts, many criticisms of which I agree with.
The Galbraith report established that some people have lost confidence in Mr. Howell, but not whether that loss of confidence was well founded or justified. I have never seen such a shoddy or flimsy document on which to base serious action. Mr. Howell has been thoroughly victimised. He has faced no specific charges, so has had no opportunity to rebut specific charges. Vague assertions of loss of confidence are not the same as being guilty of wrongdoing that justifies the deprivation of a person's livelihood, yet that is what is happening.
The Minister of State, Department of Health, my hon. Friend the Member for Southampton, Itchen (Mr. Denham), told me that
the proper procedures have been followed
and that
there has been proper consultation with the regional office."—[Official Report, 8 June 1999; Vol. 332, c. 460.]
I wonder whether he really thinks it is permissible for the NHS to sack an employee without disciplinary procedures. I think that, on reflection, he will decide that it is not.
A chief executive with a difficult job to discharge may become unpopular with some people, especially if he finds it necessary to complain about some of their work. Mr. Howell had indeed complained about the work of two of the executive directors—the director of finance, Mr. Tomlinson, and the then director of nursing, Mrs. Hedley. I have details of that available, but no time to elaborate here.
As I have said, the board was divided. Three non-executive directors opposed Mr. Howell, while the then chairman and two non-executive directors supported him, although they reluctantly agreed to the suspension.
At first, Mr. Howell was extremely anxious to return to the Guild trust. His first reactions were a robust desire to vindicate himself and the work of the Guild trust and to resume his work. However, his health has subsequently been badly damaged by what has been a long and bitter dispute, and by his feelings of injustice and victimisation. He has been isolated, had no access to papers from which to prepare a case and, indeed, no one to whom he could present a case. He was, and remains, strongly of the view

that there should be a proper public inquiry into all those circumstances. However, as I said, his health has been badly damaged and he wishes to take early retirement on medical grounds, to which he may well be entitled. A proposal for early retirement had been put to him and he has accepted it, subject to clarification which was never received.
My right hon. Friend the Secretary of State has now appointed a new temporary chair and a new board. I have been astonished to find that, without even seeing Mr. Howell or his representatives, it has decided to terminate his contract. It has even ignored the fact that he is probably entitled to early retirement on medical grounds, which would not involve the trust in any expense. Instead it has issued press releases publicising its decision, even while ostensibly allowing Mr. Howell a right of appeal. Incorrect statements implying that Mr. Howell had been demanding large sums of money have been allowed to gain credence and his reputation has been damaged—in his opinion, irreparably.
Mr. Howell has played an important part in building an improved service in my area. He has committed no misdemeanours or offences of any sort, he is passionately devoted to patients and their families and to the national health service, yet he is rewarded by being deprived of several years' employment. That is damaging to the NHS as well as a great injustice.

Mr. Evans: Let the Minister reply.

Audrey Wise: I do not expect the Minister to give me a definitive reply and I am aware that I have left him little time, but I hope that he will earnestly reflect on what I have said. Indeed, I am sure that he will do so.

The Minister of State, Department of Health (Mr. John Denham): I should begin by congratulating my hon. Friend the Member for Preston (Audrey Wise) on obtaining this Adjournment debate. The events at the Guild Community Health Care national health service trust have generated a considerable amount of public and political interest. Indeed, this is the second time that the House has debated events at the trust in just under a month.
My hon. Friend has spoken of the good work of the trust and the achievements of the former trust chief executive, Mr. Les Howell. His contract has recently been terminated and he has appealed against that decision. Obviously, hon. Members will understand that it would not be appropriate for me to comment on the correctness of the action or the appeal that is pending at this time.
The trust's difficulties have been widely discussed and reported in recent weeks, but, as my hon. Friend acknowledged, they go back much further than that. The former chairman's decision, formally to suspend the chief executive on full pay and without prejudice from 5 October 1998, followed successive inquiries and reports by different, independent panels, all of which had identified unsound practices and failure to follow the appropriate procedures.
The effect on a trust whose patients are often disturbed and vulnerable people was obviously a matter of the utmost concern to those who commission its services, to the local community and to the people who work in it.
At the risk of repeating some of the history, in early 1997, the North West Lancashire health authority received the report of an inquiry that it had commissioned into an incident involving a patient who had absconded from the Langdale unit. That report made 44 recommendations for improvements to the clinical, nursing, administrative and security services at the trust. The report also referred to some poor external relations, most notably the relationship between the Guild and the lead commissioner of its services, North West Lancashire health authority. Furthermore, the report observed that
the provision of community services
had
evolved in an unplanned and inchoate fashion".
The draft report into the care and treatment of Daniel Holden, however, which East Lancashire health authority received in the summer of 1998, precipitated the actions to suspend, and subsequently to dismiss, the chief executive. Daniel Holden was on the Langdale unit's supervision register when he murdered a neighbour in Darwen in March 1997. Since the patient was an East Lancashire resident at the time, it fell to that health authority to launch an independent inquiry in line with statutory requirements. The report concluded that the chief executive's
responsibilities had not been adequately discharged
and that the board should, therefore, consider how to bring about changes in anagement style that would enable the trust to make a fresh start.
The inquiry had been conducted over six months, and its final report, the Holden report, itemised failures by the trust to carry out certain fundamental procedures correctly, if at all. By last summer, there were indications that the trust had taken steps to address the recommendations of earlier reports and that some of the clinical, nursing and administrative inadequacies identified had been put right.
On 20 August 1998, however, East Lancashire health authority invited the trust to check the draft Holden report for
any factual inaccuracies, so that a final report could be produced and formally received and considered by the Health Authority.
I am advised that the response of the trust's chief executive to the draft report was the cause of concern for some members of the trust board.
On 1 October, three executive and three non-executive directors of the Guild visited the regional offices of the NHS executive to voice their concerns to the chairman of the north-west regional office and the regional director. On 2 October, the three non-executive directors gave the chairman, Mrs. Diamond, a letter in which they called for Mr. Howell's suspension.
Regional officials met Mrs. Diamond a week later. She had already spoken to Mr. Howell and advised him to stay at home on extended leave while the trust board considered how to respond to the Holden report. The regional director explained to her that, unless Mr. Howell were formally suspended from his post, he would remain the accountable officer for the trust and that that would not be satisfactory. As a consequence, Mrs. Diamond wrote to Mr. Howell suspending him on full pay and without prejudice from 5 October.
The trust board then unanimously agreed to commission an investigation into the specific criticisms of the chief executive in the Holden report. The regional

office offered advice about suitable candidates to undertake this work; a list of several names was put forward for consideration, and the chairman and non-executive directors took the final decision.
The inquiry team consisted of a chairman, Mrs. Ann Galbraith, former chair of a major trust in another region, and one other panel member, Mr. Neil Campbell, chief executive of the Dumfries and Galloway health board. The terms of reference were agreed unanimously by the trust board on 20 October.
The panel drew up a list of people to be interviewed and then offered all Guild employees, by means of a special edition of the staff bulletin, the opportunity to give confidential evidence to the inquiry. The panel's report, known as the Galbraith report, was completed just before Christmas. It upheld many of the findings of the Holden report and concluded that the chief executive's position was "untenable". The report refers to people being
keen to record their appreciation of Mr. Howell and to illustrate his achievements during his employment at the Guild",
but it also stated:
The panel is greatly concerned by the sheer weight of opinion showing a lack of confidence in the management style of Mr. Howell.
The panel advised the trust board that Mr. Howell had lost the confidence of a significant number of the individuals and organisations with whom and with which he had had regular contact.
At a meeting on 29 December 1998, the chairman and non-executive directors agreed to accept the report's first recommendation, which indicated that Mr. Howell's position had become "untenable". After discussing her own position with the regional chairman on 9 January 1999, Mrs. Diamond resigned as chairman two days later. Between January and March, the non-executive directors had further discussions and on-going negotiations with Mr. Howell's representatives.
On 19 April, the Secretary of State met Mrs. Kirk, the current chair of the trust, and concluded that she was the right person to lead the trust. She agreed to take up the post for six months with effect from 17 May. The Secretary of State and Mrs. Kirk discussed the need for a fresh start, and the House will know for reasons that I have previously outlined that three non-executives were subsequently removed from office and two resigned. A new non-executive team was appointed from 18 June.

Mr. Evans: Will the Minister give way?

Mr. Denham: No, I cannot possibly give way at this time.
After looking into the background to Mr. Howell's suspension, Mrs. Kirk concluded that the need to establish strong leadership was paramount and that the trust's genuine attempts to negotiate with him had stalled. She recommended to her trust board that Mr. Howell should be dismissed. It unanimously approved that course of action and the chairman wrote to inform Mr. Howell that his appointment would be terminated from 11 June. He has since exercised his right of appeal, and I understand that a meeting has been arranged for 13 July to exchange documentation and agree the process for the appeal and the dates for the hearing.

Mr. Evans: Will the Minister give way on that point?

Mr. Denham: No. The hon. Gentleman had an extended Adjournment debate just a few weeks ago.
The appeals panel that has been established by the trust consists of Mr. Ian Pirnie, the former chairman of Ashworth high security hospital and present chairman of Morecambe Bay health authority, Dr. Nuala Swords-Isherwood, chairman of Stockport Acute Services NHS trust and Mr. Mike Deegan, chief executive of Warrington Hospital NHS trust, who was previously director of human resources for the NHS Executive. The panel is charged with establishing whether the chairman and non-executive directors of the trust have acted appropriately in terminating Mr. Howell's contract of employment. The dispute is between Mr. Howell and his ex-employers, and it is for the panel to judge whether the interests of natural justice have been properly served.
This has been a unique and difficult chapter in the history of NHS trusts, but our overriding objective throughout has been to ensure that the patients and staff of Guild Community Health Care NHS trust are provided with the best possible conditions in which to receive and deliver treatment and care. I hope that matters will be brought to a satisfactory conclusion as quickly as possible, that all the people affected by the events of recent months can resume their normal lives and that the trust can get on with the business of providing good quality health services to the local community.

Question put and agreed to.

Adjourned accordingly at four minutes to Eleven o'clock.